McKinsey & Company has cut over 10% of its global workforce—amounting to approximately 5,000 roles—since the end of 2023. The dramatic move comes amid a broader slowdown in the consulting sector, marked by declining demand for traditional strategic services and increased disruption from artificial intelligence (AI) competitors.
These layoffs, affecting mostly back-office personnel and roles in data and software engineering, signal one of the most significant operational reductions in McKinsey’s nearly 100-year history.
Shifting Industry Landscape Triggers Cuts
In recent years, the consulting industry experienced record growth as companies sought advice on navigating the COVID-19 pandemic, mergers, supply chain issues, and digital transformation. But as macroeconomic conditions stabilize and corporations scale back on large-scale consulting projects, many firms—McKinsey included—are now seeing a reversal of that boom.
McKinsey’s staff cuts reduced its total global headcount from more than 45,000 at the end of 2023 to around 40,000 by mid-2025. The firm initiated this restructuring as part of a wider realignment strategy meant to streamline operations and enhance agility in a more competitive marketplace.
Focus on Back-Office and Tech Roles
The largest portion of layoffs impacted administrative departments, with around 1,400 back-office positions eliminated. Additionally, roughly 400 roles in data science and software engineering were phased out. These roles, once central to McKinsey’s digital expansion strategy, have become increasingly redundant or overlapping amid the rise of more cost-effective AI tools and platforms.
While many in the tech and analytics community saw McKinsey as a secure haven for data-driven innovation, the firm’s recent shift shows how even consulting powerhouses are not immune to automation and changing client demands.
Rising Pressure on Consultant Performance
Beyond direct layoffs, McKinsey has also toughened its internal performance evaluation system. According to internal communications, more rigorous mid-year reviews have pressured underperforming consultants to exit voluntarily or face managed departures. This initiative is part of a cultural reset aimed at improving productivity and cost-efficiency across the board.
Despite this shake-up, the firm maintains it remains focused on growth and talent development. Plans are already in motion to recruit thousands of new consultants by 2025, especially in areas tied to emerging technologies and sustainability.
Industry-Wide Transformation
McKinsey is not alone in making such cuts. Other consulting giants, including EY, BCG, and Accenture, have all introduced layoffs, hiring freezes, or internal restructuring to manage costs and shift focus to next-generation services.
This trend signals a broader recalibration of the consulting model. Traditional services centered on strategy, restructuring, and operations are increasingly being challenged by digital-first competitors and in-house corporate teams armed with sophisticated analytics tools.
Moreover, McKinsey and its peers are feeling additional pressure from the legal and reputational fallout of previous consulting engagements, including high-profile settlements in the U.S. and Europe. These factors have contributed to the urgency behind recent belt-tightening measures.
Looking Ahead: Innovation and AI Integration
McKinsey has publicly committed to investing in generative AI technologies to future-proof its consulting offerings. The firm is developing proprietary platforms to automate routine analysis and enhance client insights through machine learning.
Company leadership believes these investments will not only improve internal efficiency but also open up new revenue streams. Executives have highlighted ongoing pilot programs and strategic partnerships aimed at building AI-enhanced advisory services.
As the industry adapts, McKinsey’s challenge will be balancing innovation with operational discipline—managing the present while investing in the future. The success of this approach could serve as a bellwether for the broader professional services landscape.
