From Bloomberg, December 15:
As McKinsey & Co. partners gathered in the consulting giant’s birthplace in late October, Bob Sternfels delivered a rallying cry. “We will kick some ass as we start our second century,” the firm’s top executive told the thousands of attendees.
But away from the 100-year festivities in Chicago, McKinsey bosses have been conveying a more pragmatic message: It’s time to get leaner.
The firm’s leadership has discussed with managers in non-client-facing departments the need to cut about 10% of headcount across their business, according to people with knowledge of the matter. That could amount to a few thousand job cuts that McKinsey would stagger over the next 18 to 24 months, the people said, asking not to be identified because the details are private.
For McKinsey, the go-to adviser for companies and countries, it’s the type of cost-cutting approach that its consultants often prescribe to clients. The firm’s revenue growth has flatlined in the last five years, leading to a reset after rapid hiring over the prior decade.
“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,” a McKinsey spokesman said. “Just as we’re partnering with clients to strengthen their organizations, we’re on our own journey to improve the effectiveness and efficiency of our support functions.”
It’s early to gauge the net impact on headcount, the spokesman said. From 2012 to 2022, the firm’s employee count climbed from 17,000 to as high as 45,000. Since then, it has slid to around 40,000.
Firmwide revenue has hovered around $15 billion to $16 billion in the last five years, though Sternfels told partners that the company is seeing improving growth....
....MUCH MORE
Possibly related:- "The Bull Market for Economists Is Over. It’s an Ominous Sign for the Economy."
- OpenAI Says Legal Services; Consulting; And Government Services Are Seeing Productivity Gains
- "AI Is Coming for the Consultants. Inside McKinsey, ‘This Is Existential.’"
Some might dispute that consulting firms are paid to help clients improve their business, instead being paid a few million per contract to stroke the egos of the upper management that hires the consultant, praising said upper management for recognizing they had an issue, hiring the consultant and by the way the golf tournament is on us, no billables.
Some prior thoughts on consultants:
October 2013 - Clayton Christensen: The Next Industry Headed Toward Disruption--Consulting
October 2014 - Johnson Controls Fires Consultant After Affair With CEO (JCI)
October 2020 - "Killing Strategy: The Disruption Of Management Consulting"
April 2022 - "How did McKinsey advise CNN+ so badly*?"
An oldie but goodie:
The Devil tells a Consultant, "OK, I can make you richer, more successful and more famous than any Consultant alive. In fact, I can make you the greatest Consultant that ever walked the planet."
"Great" says the Consultant, "What do I have to do in return?"
The Devil smiles, "Well, of course you have to give me your soul," he says, "but you also have to give me the souls of your children, the souls of your children's children and, just for good measure, you have to give me the souls of all your descendants throughout eternity."
"Wait a minute," the Consultant says cautiously, "What's the catch?"
August 2024 - Consultant
October 2024 - "Consultants Keep Winning the AI Wars"
A few weeks ago Bain and Co. published a report that created some hubbub. Here's Bloomberg, September 24: "AI Market Will Surge to Near $1 Trillion by 2027, Bain Says".
I was asked why we didn't link to or reference the story and the simple answer is, the report reads like an advertisement for Bain's services. Here's Bain's press release announcing the publication, September 25: "Market for AI products and services could reach up to $990 billion by 2027, finds Bain & Company's 5th annual Global Technology Report".
February 28 - "Elon Musk spells danger for Accenture, McKinsey and their rivals"
..."We were hoping for Bono," says Nkende Masvingo, referring to the rock singer who has made sub-Saharan poverty his personal crusade, "but they sent us Gary Becker because U2 was on tour."
Becker, the winner of the 1992 Nobel Prize in Economics, will lead a "dream team" including Steven Levitt, co-author of the best-selling pop economics book "Freakonomics", that will set up camp in this city, the nation's capital. "First, we need to understand the situation," said Becker ...
