Consulting firm McKinsey & Co plans to eliminate about 2,000 positions – in one of its biggest job cuts ever, and adding to the series of layoffs by companies across sectors – Bloomberg reported citing unidentified sources. The move, under a plan being called Project Magnolia, is expected to help McKinsey preserve the compensation pool for its partners, the report said. The firm has seen a rapid growth in its headcount during the past decade and is now looking at restructuring how it organises its support teams to centralise some of the roles.
“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,” DJ Carella, a company representative, said in an emailed statement to Bloomberg. However, Carella maintained that the firm is still hiring professionals who deal directly with clients. The headcount at McKinsey has risen to 45,000 now from 28,000 just five years ago, and 17,000 in 2012.
The plan is expected to finalise in the coming weeks, and the number of layoffs may change, people aware of the matter confirmed to Bloomberg. The move comes two years after Bob Sternfels took over as global managing partner following a vote by its roughly 650 senior partners to oust his predecessor, Kevin Sneader.
In other news around global layoff, German online fashion retailer Zalando also announced that it was cutting hundreds of jobs across its workforce of 17,000, confirmed a Reuters report. “Over the last few years, some parts of our company have expanded too much and we have added a degree of complexity to our organisation that impacted our ability to act fast,” the company said in a statement.
Companies across industries including finance, retail and specifically technology are cutting down their employee count amid a slowdown in demand and predictions of recession. Recently, firms like Amazon, Microsoft, Google, LinkedIn, Yahoo, Del, among others have let go of thousands of employees across several positions, not only in India but globally. Others like Goldman Sachs Group Inc., Morgan Stanley and other top banks too have sacked their employees in recent months. More than 84,400 employees were laid off across 268 companies in January alone and at least 22,800 employees were impacted in February across 104 companies, according to layoff tracking site Layoffs. Before this, November 2022 saw the most tech layoffs affecting around 51,800 employees across 2017 companies in India and globally.