McKinsey makes one of its largest-ever restructuring cuts, laying off over 10% of its workforce due to cooling demand and legal issues.

According to a recent Financial Times investigation, McKinsey & Company has reduced its employment by nearly 5,000 people globally in the last 18 months. One of the biggest waves of layoffs in the 98-year history of the multinational consulting behemoth, the decision affects more than 10% of its personnel.

Following the COVID-19 pandemic's dramatic expansion the development continued rebalancing of the consulting industry. According to those close to the organization, McKinsey's workforce shrank from over 45,000 by the end of 2023 to about 40,000 now.

Increased demand during the pandemic era propelled the company's recent rapid development, particularly into digital transformation, data analytics, and project delivery. McKinsey's headcount increased by almost two-thirds between 2018 and 2023 as customers rushed to make their business models future-proof. However, demand has cooled in the post-pandemic environment, requiring businesses to reassess their scale and strategy.

McKinsey started a significant organizational reorganization in 2023, starting with the layoff of 1,400 back-office employees. A major change in priorities was indicated later in the year when 400 data and software engineering professionals were let go. In addition to these cuts, the company tightened its performance management standards, which resulted in further departures, especially from consultants who failed to satisfy the new performance standards.

McKinsey's operating difficulties have been exacerbated by legal disputes; particularly those pertaining to its past consultancy work with US opioid makers. The business has consented to settlements for US$1.6 billion, which has put additional strain on its finances.