Global consulting giant McKinsey & Company has confirmed it has reduced its workforce by more than 10% over the past 18 months, cutting headcount from over 45,000 at the end of 2023 to around 40,000 today. The job cuts come as the firm adapts to a slowdown in demand for consultancy services and deals with the financial aftermath of costly legal settlements related to its work with opioid manufacturers in the United States.
The downsizing marks a significant shift for the New York-based firm, which had dramatically expanded its workforce during the pandemic years. Between 2018 and 2023, McKinsey increased staff numbers by nearly two-thirds to meet soaring demand for advisory services, particularly in digital transformation and crisis management.
However, that growth has been followed by a market downturn. As corporate clients reduce discretionary spending on external consultants, firms across the industry are feeling the pinch. McKinsey’s own measures have included the dismissal of 400 technical specialists in fields like data science and software engineering. A broader internal restructuring that began in 2023 also led to 1,400 back-office roles being eliminated.
Sources close to the company have said performance reviews have become more stringent, with greater pressure on underperforming consultants to leave voluntarily, as part of efforts to trim costs.
Compounding these challenges are the financial implications of McKinsey’s involvement in the U.S. opioid crisis. The firm has paid hundreds of millions of dollars in settlements linked to its past advisory work with opioid manufacturers—a controversy that continues to cast a shadow over its reputation.
Despite these headwinds, McKinsey maintains it is committed to growth. In a statement, a company spokesperson said: “As clients turn to us to help them thrive amid disruption, and generative AI enables new levels of productivity for our teams, our firm continues to grow and we’re doing more impactful work, in more ways, than ever.”
The firm also said it plans to hire thousands of new consultants in 2024 and continues to invest in staff development.
McKinsey’s 2024 annual report, published earlier this month, did not provide an updated revenue figure, but its earnings for 2023 stood at $16 billion.
The cuts reflect a broader recalibration within the consulting sector, where years of rapid expansion are now being reassessed in light of tougher market conditions and heightened scrutiny over business practices.
