Key highlights
- McKinsey & Company has announced that it may layoff about 1,400 jobs globally
- The firm indicates that it is restructuring to maintain its compensation pool for its partners to enable it more closely align with its strategies.
- The layoffs will affect its support staff and those non-client-facing roles.
- The global economic downturn has led to plans for layoffs by McKinsey & Company which is expected to begin this week.
The management consulting firm intends to begin this rare round of job cuts in order to eliminate 1,400 positions, as reported, which is 3% of McKinsey’s workforce.
McKinsey’s layoffs come at a time when the firm’s headcount grew rapidly which has led to a decision to restructure by downsizing.
What they said
The company’s executive has dubbed the job-cutting plan “Project Magnolia” as it anticipates that the choice will aid in maintaining the compensation pool for its partners and enable it more closely align with its strategies.
“The painful result of this shift is that we will have to say goodbye to some of our firm functions colleagues while helping others move into new roles that better align to our firm’s strategy and priorities.”
“Starting now, where local regulations allow, we will begin to notify colleagues who will depart our firm or be asked to change roles, according to Bob Sternfels, a global managing partner, said in a note to McKinsey staff.
Support staff likely to be affected
In one of the biggest rounds of job cuts in the company’s history, reports have it that McKinsey looks to restructure how it organizes its support teams in order to centralize some of the roles.
Support staff in roles that don’t have direct client contact are likely to be the ones affected.
McKinsey & Company said:
With the demand from our clients expanding, we continue to hire client-serving professionals and invest in our ability to serve clients. In parallel, we are redesigning the way our non-client-serving teams operate for the first time in more than a decade, so that these teams can effectively support and scale with our firm.”
McKinsey’s current workforce strength stands at 45,000 and the number of layoffs is yet to be finalized. The present headcount is up from 28,000 just five years ago and 17,000 in 2012.
The firm also has largely been profitable as it posted a record $15 billion in revenue in 2021 and surpassed that figure in 2022.
Mckinsey is present in more than 130 cities across the world and has been active in Nigeria for more than 20 years with its team of consultants. The firm has played an active part in Nigeria’s growth story since 2002, combining strategies and transformative technologies to help organizations accelerate sustainable and inclusive growth.
With this restructuring, it is not certain how many of those will be affected in its Nigeria operations. Also, it is not clear if this will go beyond the support staff to its team of consultants eventually.