[Asia Economy Reporter Jo Yujin] Amid a wave of layoffs centered on Wall Street and big tech in the United States, McKinsey & Company, the world's No. 1 consulting firm, is undertaking the largest restructuring in the history of the consulting industry.
According to Bloomberg on the 21st (local time), McKinsey plans to cut 2,000 employees (4%) out of its total workforce of 45,000. The layoffs are expected to be completed within weeks, and sources said the scale of the cuts could increase. This is the largest layoff in McKinsey's history and the biggest ever in the global consulting industry.
Bloomberg reported that this is the first time a consulting firm, which has earned huge profits by advising global companies on workforce reductions, has directly taken the scalpel itself.
The layoffs, conducted under the name "Project Magnolia," target divisions that do not directly face clients. A McKinsey spokesperson said in an email statement that "for the first time in 10 years, we are redesigning the operations of non-client service teams." The company said this measure would help maintain the compensation system for employees.
McKinsey has rapidly expanded its workforce over the past decade, doubling from 28,000 employees in 2018 to nearly twice that in less than five years. McKinsey set a record with $15 billion in revenue in 2021, and it is reported that it broke records again last year.
Bloomberg reported that McKinsey, which faced its worst crisis due to management changes and responsibility issues related to the opioid crisis that shook American society, has reached the peak of its crisis with this workforce reduction.
Meanwhile, since last year, unprecedented layoffs have continued in Wall Street and the big tech industry in the U.S. as part of tightening management due to interest rate hikes and economic recession.
Previously, Amazon laid off 18,000 employees, Alphabet, Google's parent company, cut 12,000, Microsoft 10,000, Salesforce 7,000, and Dell Technologies 6,650.
Goldman Sachs, a major U.S. investment bank (IB), has started the largest layoffs ever targeting employees in its New York and London offices, and is implementing comprehensive cost-cutting measures including a 40% annual bonus reduction and selling private jets.
Citigroup and Barclays also conducted small-scale workforce reductions, and Morgan Stanley announced early last month plans to lay off 1,600 employees, equivalent to 2% of its total workforce.
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