Published on: June 2, 2025 / update from: June 2, 2025 - Author: Konrad Wolfenstein
Project Magnolia: McKinsey recovery-a comprehensive analysis of the largest wave of discharge in the company's history-creative image: Xpert.digital
From boom to crisis: McKinsey faces change
Restructuring at McKinsey: A turning point in the consulting industry
McKinsey & Company, the world's leading management consultancy, has carried out an unprecedented restructuring in the past 18 months, which has led to a personnel loss of more than 10 percent of the global workforce. This development marks a dramatic turning point for the company, which had recorded rapid growth during the Corona pandemic. At the end of 2023, McKinsey still employed around 45,000 employees worldwide, while the current workforce has shrunk to around 40,000 employees. This reduction of around 5,000 jobs represents the largest wave of discharge in the almost 100-year history of the company and reflects the changed market conditions in the consulting industry.
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The “project Magnolia”: origin of the restructuring
Strategic realignment and first reduction round
The systematic personnel reduction at McKinsey began in 2023 with the internal restructuring program called “Project Magnolia”. This initiative originally aimed to delete about 2,000 jobs, with the focus initially on support employees who have no direct customer contact. The naming of the project according to Magnolie, a plant genre that is known for its elegance and robustness, should symbolically underline the adaptability and long -term vision of the company.
The relationship between consultants and non-advisors at McKinsey was one to one, which was exceptionally high compared to other companies in the industry. While other actors of the MBB trio (McKinsey, Boston Consulting Group, Bain) have a ratio of one to three, medium-sized consulting societies often come from one to ten. This structural peculiarity made McKinsey particularly susceptible to increases in efficiency in economically challenging times.
Expansion of the cuts to core areas
What started as a targeted breakdown of back office positions developed into a more comprehensive restructuring. In addition to the originally planned 1,400 back office positions, around 400 specialists from the areas of data and software technology were also released. The cuts no longer only affected administrative areas, but also reached the advisor level, where the pressure on less powerful employees was noticeably increased.
McKinsey's leadership hoped to receive the remuneration pool for the partners through these measures. This strategy reflects the company's partnership structure, in which the more than 3,000 active partners act as owners and are directly affected by the company's profitability.
Effects on the partner structure and promotion policy
Drastic reduction in partner transportation
In parallel to general personnel loss, McKinsey has also drastically adapted its transport policy. The number of annual partner transports fell from over 400 in 2021 to around 250 in 2023 and finally only about 200 in 2024. This development represents a decrease of 50 percent compared to top years and underlines the company's changed business strategy.
For many employees of large consulting companies, promotion to partner is the highlight of their professional career and as a sign of excellence and dedication. The reduction of these ascent options has far -reaching effects on employee motivation and long -term talenting to the company. As a partner, employees not only receive a direct share of the equity partner in the strategic orientation of the company, but also a direct share in the annual profit.
Leadership crisis and internal tensions
The restructuring measures have also led to internal tensions that are reflected in the management level. McKinsey boss Bob Sternfels failed in the first ballot for a second three-year term as a global managing partner after more than half of the 750 senior partners voted for other candidates. This unusual development is directly associated with the controversial restructuring and the slow growth of the company.
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Market dynamics and industry -wide challenges
Agency of the demand for consulting services
Personnel reduction at McKinsey takes place against the background of a general weakening of the consulting industry. After a pandeme -related boom, which led to a rapid personnel structure, the willingness of companies to pay for professional consulting services has dropped significantly. This change of market not only forces McKinsey, but the entire industry to adjust.
McKinsey had enlarged his staff by about two thirds during the pandemic, from around 17,000 employees in 2012 over 28,000 in 2018 to the maximum of 45,000 in late 2023. This aggressive expansion strategy proved to be unusual than the market conditions normalized again. In 2022, the company only grew by five percent compared to significantly higher growth rates in previous years.
Comparison with competitors
While McKinsey is shrinking, other large consulting companies pursue different strategies. The Boston Consulting Group (BCG) is still on an expansion course and was able to increase its turnover by ten percent to $ 13.5 billion and expand its staff to 33,000 employees. This divergence in the business strategies shows that the challenges of the industry can be mastered differently.
Other companies of the “Big Four” (KPMG, EY, DELOITTE, PricewaterhouseCoopers) have also reduced personnel, but to a lesser extent. KPMG was the first of the four largest auditing companies to reduce its workforce in the United States by two percent. The partner salaries at these companies have dropped consistently, for example at EY in the United Kingdom by five percent.
Regional effects and German market position
Situation in Germany and Austria
In Germany and Austria, McKinsey maintains offices in Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich, Stuttgart and Vienna. According to the Scientific Society for Management and Advice in 2021, sales in Germany were more than one billion euros in 2021. Despite the global staffing, the Swiss office was optimistic and referred to strong demand, especially in the areas of growth and performance transformation as well as digital transformation.
According to the “Balance” magazine, personnel reduction in Switzerland affected around a dozen employees in 2023. This relatively small number indicates that the German -language markets were less affected by the cuts than other regions. McKinsey Germany benefited in particular from the increasing demand for AI-related consulting services.
Future personnel strategy
Despite the extensive human resources, McKinsey emphasizes that the company continues to grow and that “more and more effective work than ever” does. The company announced that they would like to welcome “thousands of new consultants” in the coming year. This apparently contradictory strategy indicates a qualitative realignment in which inefficient structures are broken down and at the same time invested in a targeted manner in growth areas.
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Communication strategy and transparency
Reserved information policy
McKinsey is remarkable with the publication of transparent figures for the current job cuts. In the most recent sustainability report, both information on sales and the number of employees for 2024 - information that the company had communicated transparently in earlier years are missing. This non -transparency is in contrast to the traditional openness of the company and could indicate the sensitivity of the current restructuring.
The company's official communication is limited to general statements to redesign the way of working for teams without direct customer contact. A company spokesman said: "We are in the process of redesigning the way of work of our teams, who have no direct customer contact, for the first time in more than a decade so that these teams can effectively support and grow with it".
Structural changes in the consulting industry
The massive personnel loss at McKinsey signals a structural change in the consulting industry. After years of continuous growth, companies have to adapt to changed market conditions. Digitization and the use of artificial intelligence enable many traditional advisory tasks to be done more efficiently, which reduces the need for personnel in certain areas.
McKinsey's experiences could serve as a model for other consulting companies that have to cope with similar challenges. The focus on core competencies and the reduction of overhead costs are likely to become an industry-wide trend. At the same time, new business areas, especially in the area of digital transformation and sustainability, open up to qualified specialists.
McKinsey and the consulting industry on the crossroads: Sustainable realignment?
McLinsey's personnel reduction by around 5,000 employees in the past 18 months marks a turning point in the history of the company and the entire consulting industry. The “project Magnolia” developed from a targeted increase in efficiency into a comprehensive restructuring that concerns all areas of the company. The drastic reduction in partner transports and internal management conflicts show that the changes have profound effects on corporate culture.
While these measures lead to uncertainty and criticism at short notice, McKinsey positions itself for a more sustainable future in a changing market environment. Focusing on profitable business areas and the willingness to reduce inefficient structures could strengthen the company's competitiveness in the long term. The development will show whether this radical realignment is successful and can serve as a model for the entire consulting industry.
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