McKinsey is drawing up plans that could see thousands of jobs cut over the next two years, as the global consultancy responds to rapid advances in artificial intelligence and a prolonged slowdown in client demand.
Senior partners at the firm are understood to have held early discussions with leaders of non-client-facing departments about reducing team sizes by as much as 10 per cent. While McKinsey declined to confirm the scale of the cuts, Bloomberg, which first reported the plans, estimated that “a few thousand” roles could be lost in stages over the next 18 to 24 months.
A spokesperson for McKinsey said the firm was reviewing its internal operations as technology reshapes how work is done.
“As our firm marks its 100th year, we’re operating in a moment shaped by rapid advances in AI that are transforming business and society,” the spokesperson said. “Just as we’re partnering with clients to strengthen their organisations, we’re on our own journey to improve the effectiveness and efficiency of our support functions.”
McKinsey is one of the world’s most influential management consultancies, advising companies and governments on strategy, technology adoption and cost-cutting. Its client list includes major multinationals such as Coca-Cola, Microsoft and Goldman Sachs, as well as public sector bodies around the world.
Cost reduction, often through workforce cuts, is a frequent recommendation made by McKinsey and its peers to clients. The firm itself embarked on an aggressive hiring drive between 2012 and 2022, when global headcount rose from about 17,000 to 45,000. That number has since fallen to around 40,000 following a previous round of layoffs in 2023. Roughly half of McKinsey’s employees work in non-client-facing or back-office roles.
Bob Sternfels, McKinsey’s global managing partner, signalled the potential for further reductions earlier this year. In a television interview in September, he said the firm would “probably have fewer folks in the non-client-deployed areas” as technology changes how internal operations are run.
“We’re continuing to add folks who are client-deployed and we see an ever-increasing need for that,” Sternfels said. “But we are rethinking our centre-based operations by leveraging all of this new technology.”
McKinsey’s plans mirror decisions taken by other major companies as AI reduces the need for human labour in support functions. Salesforce chief executive Marc Benioff said in August that the company had cut 4,000 customer support roles because it needed “less heads”, while fintech group Klarna has dramatically reduced its workforce after replacing many roles with AI systems.
At McKinsey, discussions around job reductions are still said to be at an early stage, with no final decisions taken on the precise number of roles affected or which countries will bear the brunt. The firm employs around 2,000 people in the UK, including a significant number in non-client-facing positions.
Beyond technological change, the proposed cuts also reflect a broader slowdown in demand for consulting services. Many companies have reined in spending on advisers over the past two years amid geopolitical uncertainty and a weaker global economy, following a surge in consultancy work in the immediate aftermath of the pandemic.
McKinsey’s Big Four rivals, Deloitte, EY, KPMG and PwC, have also seen revenue growth stall and have trimmed their workforces. McKinsey’s own annual revenue has remained broadly flat at between $15 billion and $16 billion for the past five years, although Sternfels told partners at the firm’s annual meeting in Chicago in October that he was increasingly optimistic about future growth.
For now, McKinsey appears set to apply to itself the same logic it has long urged on clients: using new technology to do more with fewer people.
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McKinsey plans thousands of job cuts as AI reshapes consulting workforce
