McKinsey is offering to pay hundreds of its senior employees to leave the firm and look for work elsewhere, the latest attempt by the consulting giant to reduce staff amid a sector-wide downturn.
Managers at the UK side of the business are being given the chance to spend up to nine months “on search”, an internal phrase referring to employees who are spending their time looking for a new job, rather than working on client projects. Staff would still be receiving their full salary, which would run into the hundreds of thousands of pounds if they spent the maximum nine months trying to find employment elsewhere.
If the employees have not found a new employer by the end of the nine months they have to leave the firm.
Managers at the US firm have received similar offers but the period of time allowed to search for work may differ, according to those familiar with the situation. It is understood that hundreds of employees between the two firms will be weighing up these proposals, although final numbers are still being worked out. While they are “on search”, McKinsey gives employees career coaching and helps them with administrative matters, such as updating CVs. They also have access to the firm’s resources, such as its IT systems and email accounts, which they can use to find work. Similar initiatives have been used before among poor-performing staff at McKinsey, although this latest round is being expanded to include employees who are held “in good standing’, an internal term meaning high performing. There has been a downturn in the consulting market, which has forced McKinsey and almost all its competitors to cut jobs. Last year McKinsey announced Project Magnolia, which cut 1,400 back office jobs, in one of the largest restructurings in the firm’s 98-year history. The Big Four accounting firms have also cut thousands of jobs, disproportionately in their consulting divisions. • How an anonymous letter caused chaos at McKinsey The latest offer will be made to “engagement managers”, the firm’s project managers who oversee consultants while they are on client work, and “associate partners”, who are tasked with winning new work for the firm. Sources at the firm said that the approach was also meant to counter low “attrition”, the rate at which workers quit. PwC, Britain’s biggest accountant, announced 600 job cuts in October for similar reasons, citing the lack of staff leaving of their own will. McKinsey staff have alleged internally that it has been cutting jobs by giving staff low scores in their six-month appraisals. The firm said it maintains a high bar for performance and that its evaluation criteria were consistent with former years. “We routinely refine our approach to development and performance to ensure we continue to meet these goals, and we continue to recruit and hire robustly,” a spokesman said. Consulting firms enjoyed a boom during the pandemic, but there has a been a downturn ever since as tougher economic circumstances force companies to cut back their spending on corporate advice GETTY Consulting firms enjoyed a boom during the pandemic, when companies sought their help on how to digitise their operations. However, companies that are facing tough economic circumstances have since cut back their spend on expensive corporate advice. Described by the author Duff McDonald in his history of the company, The Firm, as “maybe the single greatest legitimiser of mass layoffs [of] anyone, anywhere, at any time in modern history”, McKinsey has a long history of advising managers to slash jobs to improve efficiencies. As part of its recent work in the UK it has been involved in advising Rolls-Royce and the consumer health brand Haleon on job-cutting strategies. A McKinsey spokesman said: “A core part of our mission is helping people learn and grow into leaders, whether they stay at McKinsey or continue their careers elsewhere. These actions are part of our ongoing effort to ensure our performance management and development approach is as effective as possible, and to do so in a caring and supportive way.” The firm also said that it booked a record $16 billion in revenues last year.