Strategy Simplified S18E7: No, McKinsey Didn’t Just Lay Off 10% Of Its Staff (May 28, 2025)
May 28, 2025
This discussion dives into the truth behind misleading headlines about McKinsey's alleged layoffs. It highlights how voluntary attrition and performance standards are reshaping the firm. The hosts shed light on how consulting firms can serve as economic indicators, particularly in relation to AI market developments. They also analyze technology's impact on financial indices and tease the implications of NVIDIA's earnings report. Expect a fresh perspective on the consulting landscape and emerging market trends that matter.
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Misleading Growth Comparison
- Comparing McKinsey's current growth to its pandemic era growth is misleading due to an abnormal boom during the pandemic.
- A fair comparison uses 2019 as the baseline, revealing McKinsey is still growing and larger than pre-pandemic.
Attrition Drives Headcount Reduction
- McKinsey's 10% workforce reduction is mainly due to natural and increased attrition, not mass layoffs.
- They also cut back-office roles and didn't fill some positions, reflecting restructuring rather than layoffs.
McKinsey Hiring Remains Robust
- McKinsey continues robust hiring despite headcount cuts, signaling healthy project pipelines and demand.
- BCG shows slower hiring and potential pipeline concerns, contrasting McKinsey's position.