As McKinsey & Co. marked its 100th anniversary with fanfare in Chicago, the consulting firm’s leadership struck a confident public tone about its future.
Yet behind the scenes, executives have been delivering a more restrained message: the firm needs to become leaner after several years of flat growth.
At the late-October gathering of partners in McKinsey’s birthplace, global managing partner Bob Sternfels urged thousands of attendees to look ahead with ambition.
“We will kick some ass as we start our second century,” he said, portraying a firm ready to move past recent setbacks.
Away from the celebrations, however, McKinsey managers have been discussing plans to cut about 10% of staff in non-client-facing roles over the next 18 to 24 months, according to a Bloomberg report citing people familiar with the matter.
Cost discipline after years of expansion
The proposed reductions could amount to several thousand job cuts, staggered over time, and would follow a period of rapid expansion.
McKinsey’s workforce grew from about 17,000 employees in 2012 to a peak of roughly 45,000 in 2022.
Since then, headcount has declined to around 40,000.
Revenue growth has also slowed. Firmwide revenue has hovered between $15 billion and $16 billion over the past five years, a plateau that has prompted what insiders describe as a reset after a decade of hiring and expansion.
A McKinsey spokesperson said it is still early to gauge the net impact of the planned changes, emphasizing that the firm continues to hire consultants even as it trims support functions.
“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, adding that McKinsey is working to improve the effectiveness and efficiency of its internal operations, mirroring advice it often gives clients.
Industry headwinds and regional pressures
McKinsey’s moves reflect broader challenges facing the consulting industry.
As corporate and government clients become more cost-conscious, demand for traditional advisory services has softened.
Rivals including EY and PwC have also reduced staff in recent years, while McKinsey last month cut about 200 global technology roles as artificial intelligence automates certain functions.
External pressures are adding to the strain.
Accenture has warned that efforts by US President Donald Trump to curb government spending on consulting could limit growth.
In China, authorities have discouraged the use of international consulting firms in favor of domestic players.
Saudi Arabia, once a major source of fees for McKinsey, has also pared back payments for consulting projects; over the decade to 2024, the firm earned at least $500 million annually from the kingdom, according to the report.
Leadership optimism amid reputational challenges
Despite the headwinds, Sternfels has sought to rally partners around a narrative of recovery.
At the Chicago conference — attended by business leaders such as Rio Tinto Chairman Dominic Barton, Visa chief executive Ryan McInerney, and former US Secretary of State Condoleezza Rice — he said the firm was poised to move beyond years of underwhelming growth.
McKinsey has faced sustained scrutiny over its work for governments in China and Saudi Arabia, as well as past engagements with opioid manufacturers in the US.
The firm has paid hundreds of millions of dollars in settlements related to allegations that it helped fuel the opioid crisis.
“I feel we’ve collectively righted our ship,” Sternfels told partners, signaling confidence that McKinsey can balance renewed growth ambitions with tighter cost control as it enters its second century.
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