McKinsey to cut up to 2000 jobs in back-office

Hi there,

Unfortunately not a good situation for everyone involved, also considering that large parts of the consulting staff are on the beach currently (same for any other firm really).

There has been a lot of sugarcoating or ignorance about the outlook here since the summer/fall of last year.

My observations regarding the current situation are the following:

Personal experience

Some of my clients' interviews were already rescheduled or even strong profiles were asked to re-apply/continue their application in Q3 and later after having completed recruiting tests with good scores or having been through screening.

Impact on hiring

While for all firms fewer people make it through resume screening, only some firms adjust the bar for the interviews. The latter are happy to find enough people to make it through the selection process. In that case, they would extend offers, potentially with starting dates further in the future.

We might even see a full hiring stop, depending on how bad the situation becomes. Generally, experienced hires are doing better than graduate hires at the moment. Same goes for specialists.

Impact on engagements and job security

External advisor spending is usually one of the first expenses to be cut during an economic crisis.

Yes, recovery and transformation projects increase, but every other consulting vertical decreases by much more. I have been told stories from 2008/09, where new hires were not staffed for 6 months and then let go without ever having worked on an actual engagement. 

It all depends on how bad the global economic situation is going to get. My hunch last year was that we see a partial to full-hiring stop by early this year for a couple of months up to 1 year. This seems to materialize now. Now, lay-offs have started and it is not yet clear how far it will go. It might also affect consulting staff in a couple of months. KPMG has already started.

On top of that, keep in mind that tech firms and other industries already started their lay-offs, which means that the potential supply of job seekers increases even more compared to now lower demand for them.

At this point, it makes sense to have valid backup options available, potentially for industries that are less affected by external events (e.g., pharmaceuticals).

I have been interviewed on the topic here: https://www.semafor.com/article/02/16/2023/the-rich-are-getting-poorer

Nonetheless, I would recommend that you start applying now because 

1. you will not know how the situation evolves and it might get worse still.
2. you can likely get a second chance if you are now affected by a hiring stop. You might be asked to apply again in the fall (without a ban period).

All the best for your applications! To prepare for McKinsey specifically, check out these articles here:

https://preplounge.com/mckinsey-interview

https://www.preplounge.com/mckinsey-pei

Cheers,

Florian

Hi there,

I think this is an interesting question that may be relevant for many people. I would be happy to share my thoughts on it:

• I feel that you need to put things into perspective regarding the McKinsey layoffs. The McKinsey layoffs are essentially a non-event. While we cannot know for certain about the root cause, from the information provided, it is likely that they simply want to outsource certain consulting support functions, which is nothing surprising for strategy consulting companies.
• As for the future, we really cannot tell. So far, to my knowledge, there have not been any layoffs besides McKinsey and KPMG (cf. https://www.preplounge.com/en/consulting-forum/kpmg-layoff-15443), but recruiting has slowed down or been frozen altogether, and start dates have been delayed.
• Personally, I would advise you to apply nonetheless since there really isn't any way to navigate the situation either way. Make sure you have your strongest application and see about the results.

If you would like a more detailed discussion on how to address your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

Hello,

The advice (which will be pretty unanimous) is to apply. There are 2 main scenarios/outcomes

1. Your application is strong and meets the mark

•        1A. The office you are applying to is hiring  → you will get  invited to the interview
•        1B. The office you are applying to is not really hiring now → if it's a really strong application, you likely will be       asked to reapply again without a temporary application ban 

2. Your application is strong and does not meet the mark

• Whether you apply now or later, your application will still get rejected
• You may or may not get feedback from the firm on why you were rejected, but you will need to improve on it before reapplying

Assuming in scenario #1 you get the interview and you do pass, but for whatever reason cannot offer you the job right now, they will likely ask you for a deferred start date. 

So, probably better use of your energy and effort to focus on your interview application and preparation. All the best!

Hello Mike,

While your concern is valid, it is unclear to predict if the situation is about to get better or worse. Thus, it doesn't hurt to apply now.

Also, it depends a lot on the geography that you are applying. If you're applying to emerging economies in Asia or Middle East, you should not be overly worried as these offices are still growing. However, if you're applying to mature markets like US, UK, EU - then the hiring indeed is slowing down in these markets - but again, unclear if situation will improve any time soon.

Go ahead with the application :) Feel free to message me if you need any help with your applications or preparing for interviews.

Best,

Rushabh

Hi there,

Are you applying for a client-facing or ‘back-office’ role? 

Regardless, I would still encourage you to apply. The majority of these news are hearsay anyway and something that is more propagated by candidates rather than the actual firms they are applying to. 

Even when companies cut back on some roles, they might still hire in others, so it makes sense to actually try and apply widely. 

Best,

Cristian

Dear Mike,

While McKinsey's announcement regarding job cuts in the back office may cause some uncertainty, it is important to keep in mind that these cuts do not affect client-facing roles. As such, I would not expect this announcement to have a significant impact on your job search at MBB for a client-facing role.

I would advise you to continue with your job search as planned and to submit your application if you feel ready. It is also worth noting that McKinsey is not the only firm hiring, and there may be opportunities at other MBB firms that you could explore as well.

Remember to focus on highlighting your skills, experience, and fit for the role during the application process, and be prepared to discuss any concerns or questions that may arise during the interview process.

I hope this advice helps, and I wish you the best of luck with your job search.

Best regards,

Victoria

Did you know McKinsey also added 17,000 jobs in the past 5 years?

Always remember how easy it is for media/politicians to cherry pick numbers!

That said, there is no denying the slowdown in hiring. For now, I agree that for the most parts consultants are not being cut. And, I would be very surprised if they were. Ultimately, remember that these companies can “fire” people simply by making their up-or-out model stricted.

That said, they still need to hire. Churn is about 20% at these firms. They still need people starting as entry/consultant level and working their way up. 

So, remember, that throughout history, these firms have almost never fully cut hiring for more than a half year period.

For you focus on the things you can control.

 I recommend you network extensively. Figure out how the offices in which you're interested are doing. Try to get referrals. See if slots are open for your specific role. Apply to a lot of firms (I applied to 30+….even when times were good). Get your resume/cover letter as good as possible (with a coach review).

Good luck!

Hi there,

a lot has already been shared by other coaches, but here my toughts in summary:

1. For McK not a good time to recruit right now, unless you already have your invite
2. Based on 1 - to optimize your chances with this specific firm, suggest you wait a bit, unless you have a very strong referral.
3. Would focus on other firms, if the application needs to happen right now - BCG, Bain and certain Tier 2s are still hiring quite a bit.

Feel free to reach out and share more context (location, role, , if you'd like more specific advice. Happy to discuss.

Regards, Andi

Not sure what you gain from postponing. You can apply now AND later again if you are unsuccesful now.

Having said this, there is a relevant difference in client facing and back-office roles. Client facing consultants tend to have shorter tenures (they either move to the clients or they are “counseled out”), meaning that a consulting firm doesn't need to be very proactive to reduce its staff… just needs to wait a few months and cut back on recruiting intakes and the pyramid will sort itself out.

In any case, they will hire some consultants every year, unless the situation is dramatic. Because they don't want to lose out on the talent and because they need to constantly train new people who will be their managers in 3-7 years from now, when the economy will be better. If they don't hire now a few people, they'll be short on critical staff a few years from now.

If you are an experienced hire, then your chances aren't great… but then again, as I said in the beginning, you can apply now AND later.

Hi there,

this is a situation that impacts the entire consulting industry. So if you want to work as a consultant, you might as well apply because you won't find a different setup for a while. It's not a good time to apply but it is what it is.

Yes, there are some regional differences, but the overall trend is the same. It is not an ideal situation, but waiting on the sidelines for a year or more is probably not an option either. If you did get rejected, your ban-period would overlap with the economic downturn and you could try again when things look better in 12-18 months. 

If things still look gloomy a year from now, however, then waiting to apply wouldn't have been a good move either. So it seems to me that there is limited to no upside in holding off on your application.

Good luck