McKinsey & Company has quietly cut over 10% of its worldwide staff in the last 18 months, one of the biggest rounds of layoffs in its almost-century-long history. The reductions come as the consulting giant grapples with a steep decline in revenue growth, the repercussions of big legal settlements, and industry-wide trends precipitated by generative AI, the Financial Times reported.
Through May 2025, McKinsey has about 40,000 employees—down from over 45,000 reported in late 2023, those familiar with the situation say. The reductions come just a few years after the firm quickly scaled its workforce by almost two-thirds to keep pace with surging demand for consulting amid the pandemic.
Cost-cutting follows legal and market headwinds
In 2023, McKinsey laid off 1,400 back-office staff as part of a wide-ranging restructuring effort. It also let go of 400 specialists in data science and software engineering, among other fields. Furthermore, the firm applied added pressure to lower-performing consultants through an unusually tough mid-year review process, compelling many to leave voluntarily.
The contraction comes after a $1.6 billion legal settlement related to the company's involvement in advising US opioid manufacturers—a reputational and financial hit that has been a heavy burden on the company's business.
Consulting boom ends, attrition slows
McKinney, like professional services firms generally, hired heavily during Covid as clients needed assistance dealing with uncertainty. But the post-Covid boom in consulting has cooled sharply, and attrition rates have fallen to all-time lows, catching firms that had anticipated higher levels of churn akin to the "Great Resignation."
The firm is now overmanned in many divisions, and McKinsey's leadership has indicated plans to rebalance internal "balance" by the close of 2024.
Competing companies demonstrate variant strategies
McKinsey's retrenchment is in contrast to Boston Consulting Group, which hired approximately 1,000 workers within the last year and recorded a 10% boost in revenue for 2024, up to $13.5 billion. McKinsey, meanwhile, has not released 2024 revenue data; its most recent reported revenue was $16 billion in 2023.
Despite the job cuts, McKinsey said it continues to hire and invest in key areas. “Our firm continues to grow and we’re doing more impactful work, in more ways, than ever,” the company said. “We continue to recruit robustly and will welcome thousands of new consultants to our firm this year.”
AI raises questions about future staffing
The consulting industry is also dealing with the emergence of generative artificial intelligence that has the potential to automate a lot of work historically being done by junior consultants. While EY among other firms asserts that AI will boost productivity without a need for job losses,
McKinsey has not excluded making additional changes as it incorporates AI tools in client service.
"Generative AI allows us to achieve new levels of productivity with our teams," the company stated, suggesting other changes in the mix of its employees in the years ahead.
McKinsey's downsizing indicates even the most elite consulting firms are not immune to wider industry disruption—whether from business cycles, legal attention, or the revolutionary impact of new technology.
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