McKinsey sacks over 350 people as consulting giant faces sluggish demand for services

US-based consulting firm McKinsey & Co. has decided to terminate roughly 360 jobs from various divisions amid a global slowdown in demand for its consulting services, as per a Bloomberg report.

Which departments are under the radar?

A report by Bloomberg quoted people familiar with the matter saying McKinsey’s job cut would be on a global scale and around 3 per cent of the 12,000 skilled and technical workforce will be under the job reduction radar.

One of the Big 3 consulting firms, McKinsey is slashing jobs from departments including employees from design, data engineering, cloud and software among others.

McKinsey achieved a historic revenue of $16 billion last year. However, the firm has cautioned approximately 3,000 consultants that their performance needs enhancement. The consulting giant has around 45,000 employees across 130 cities.

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Additionally, in recent weeks, the company has proposed to its UK employees as part of its exit deal, an option to receive nine months’ pay in exchange for leaving their positions.

McKinsey’s reason for lay off 

“We invest to grow capabilities that match our clients’ priorities, and adjust the size of a small number of others as appropriate,” a McKinsey spokesperson said in an email statement. “As part of this process, some roles will be eliminated within this small number of capabilities,” the spokesperson added.

The traditional consulting roles in the company would, however, remain unaffected, McKinsey assured.

Another case of over-hiring?

Recently, many tech and consulting companies including Apple, Dell, Deloitte, Ernst & Young, PwC, IBM have have trimmed their workforce citing different several varied reasons. The global giants are now reshaping their existing teams, after Covid-19 pandemic pushed them on a hiring spree.

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During pandemic, along with McKinsey, consulting firms such as BCG, PwC, KPMG, Grant Thornton and EY significantly hired across levels and functions.

As per The Economic Times report, some of these top consultancies together hired more than 15,000 people in the last six months during FY 2020-21, including freshers from B-schools, according to industry estimates.