Don’t call them layoffs, just call them a strategic decrease in everyday attendance. McKinsey & Company’s headcount has dropped by more than 10% in the past 18 months—the largest in the consulting firm’s history. Following mass layoffs at Deloitte and Booz Allen Hamilton, the job eliminations at McKinsey are the latest upheaval in an industry that raced to hire during the pandemic.
At the end of 2023, McKinsey had about 45,100 employees, up from 34,000 in 2020. Now, that number has reportedly dropped to about 40,000. The company says the decrease is due to normal attrition and performance review firings, but:
- McKinsey is still navigating its $1.6 billion worth of legal challenges over its work with opioid manufacturers.
- Indian tech entrepreneur Vijay Shekhar Sharma suggested that the rise of AI and ChatGPT is to blame for the headcount reduction.
Big picture: McKinsey has been relatively unscathed by federal budget cuts—largely because it was already pushed out of government contracts due to the aforementioned opioid lawsuits—and has said it would still hire thousands more staff this year. But its peers haven’t been so lucky: As a result of DOGE’s crackdown on government spending (including ending contracts with consulting firms), Deloitte said last month it would have to cut its workforce, while last week Booz Allen announced it was cutting 2,500 consulting jobs, or 7% of its workforce.—MM