I would reword the title to "McKinsey Plots Large Bonuses to its Top Execs". But besides that, the top management consulting company is laying off 10%.

My take is that management consulting is all a scam. Everyone makes money when the economy is good. Do you really think Satya Nadella or Tim Cook needs a pimply faced 23 year old Harvard MBA telling him how to run his business? No way. They are used as "evidence" by the CEO to push his case to the Board. "McKinsey recommends it" has a lot of weight.

Let's say the CEO wants to invest in quantum computing, he calls up McK to provide him proof about why this is a good idea. He pays them a large amount of money and goes to the board with their slides and throws in the "McKinsey says so" line. Voila. If it fails, the CEO can always blame the consulting company which would have vamoosed from there so no neck to choke.

That is all management consulting is today. It was the real deal decades ago, just a scam now, like many other kinds of businesses where people try to make money on old glory. That scam may be coming to an end now.

If we have any Management Consultants here, I would love to hear from you to know if my take is correct or not.

And of course, Artificial Intelligence is the bogeyman everyone loves to justify their failings or pivots.


McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry
https://www.bloomberg.com/news/articles/2025-12-15/mckinsey-executives-plot-job-cuts-in-slowdown-for-consulting-industry

Quote:

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The firm's leadership has discussed with managers in non-client-facing departments the need to cut about 10% of headcount across their business, according to people with knowledge of the matter. That could amount to a few thousand job cuts that McKinsey would stagger over the next 18 to 24 months, the people said, asking not to be identified because the details are private.

For McKinsey, the go-to adviser for companies and countries, it's the type of cost-cutting approach that its consultants often prescribe to clients. The firm's revenue growth has flatlined in the last five years, leading to a reset after rapid hiring over the prior decade.

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Quote:

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McKinsey, EY and PwC have been cutting jobs over the past few years to weather the slump. Just last month, McKinsey cut about 200 global tech jobs as it joins rivals in using artificial intelligence to automate some positions.

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ibt2Bobs

I wish I believed that GenX was simply seeing through the veil that had long fooled Boomer execs, but that's likely overly optimistic. More probably, these companies plan to use AI tools to continue to repackage even more bamboozlement to corporate America while spending less on their "prestigious" snake oil salesmen.

Claiming cuts are from non client facing positions. Not really an indictment on the services they provide and more about operational efficiencies probably driven by AI. Contracting and invoicing which they do a lot of are two functions prime for AI.

Your hate for corporate America cracks me up.

Where do you live? I feel like I need to meet you in person.

These scummy management consultants are just there to give CEO's information to cover their asses when they make a mistake. A CEO or other company leadership made a bad decision? Let's hire McKinsey to give us a report that says it was an awesome decision!

McKinsey should be making absolute bank on AI implementation right and left right now. The fact that they may not be is not a good look for them.

I wonder how many projects that had related to DEI implementation or outsourcing to low cost (read: illegal) domestic labor?

The thing that really blows is that this is structural. It's a combination of AI, offshoring, automation, etc....

Yet Powell is lowering rates with inflation at 3% in an effort to mitigate Job losses. He's also buying treasuries again!

We are going to end up with high inflation and the job losses too.

BusterAg said:

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McKinsey should be making absolute bank on AI implementation right and left right now. The fact that they may not be is not a good look for them.

I wonder how many projects that had related to DEI implementation or outsourcing to low cost (read: illegal) domestic labor?

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Unless things have changed in recent years, McK is known for advisory, not implementation. So basically they could say whatever they wanted to and just GTFO leaving implementation to someone else. If it failed, they just blamed the implementers.

More recently, the other top cos have started doing implementations.

Sid Farkas said:

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McKinsey will be around only as long as there are weak leaders who have to hire someone to hide behind.

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That is the niche market all these "management consulting" companies play in. It works well when there is a lot of money in the market.

I did business with a large computer company. I talked with a number of folks within the company about the McKenzie group. Here's what i learned from them:
1. The first thing they do is basically asked what you are looking to solve.
2. Then they ask what the ideal solution would be.
3. A bunch months and an even bunch of money later- surprise, sunrise their solution is exactly what they wanted to hear.
4. Members of the McKenzie team show up with great jobs at the client company.

As a key supplier, I was asked to be interviewed. At the end of the day, every answer i gave was skewed to meet their needs.

TXAGBQ76 said:

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I did business with a large computer company. I talked with a number of folks within the company about the McKenzie group. Here's what i learned from them:
1. The first thing they do is basically asked what you are looking to solve.
2. Then they ask what the ideal solution would be.
3. A bunch months and an even bunch of money later- surprise, sunrise their solution is exactly what they wanted to hear.
4. Members of the McKenzie team show up with great jobs at the client company.

As a key supplier, I was asked to be interviewed. At the end of the day, every answer i gave was skewed to meet their needs.

---

Exactly.

The CEO isn't looking for real advice. He is looking for corroboration. So if a consulting company comes back with advice not to do a project the CEO wants to do, he will fire them and hire another company more pliant. They will manufacture evidence for the CEO to go to the board.

Amazing business model that made so much money and hinged on human psychology, not on creating any tangible value.

After business school, all of us wanted to join these companies. Very few got in because of a recession and I didn't either. A friend who got in during better economic conditions a few years earlier told me what a sham the entire thing was. Much like the financial/wealth management industry that I was part of.

techno-ag said:

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Management: OK, this is what we want to do. We need a study to give us cover.

Consultants: Here's your study backing up what you wanted.

Management: Thanks!

Consultants: That'll be $100,000.

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We might be coworkers.

Edit,

In one case we changed accounting methods for a single location so we could close it after the change made it "look" unprofitable. All because the CEO thought we had too many locations.

After the change we lost several large customers that liked the proximity of the closed location. So we opened it back up, but they didn't come back.

Sounds familiar. Exactly what our experience was…you may have been one of our suppliers.

BusterAg said:

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McKinsey should be making absolute bank on AI implementation right and left right now. The fact that they may not be is not a good look for them.

I wonder how many projects that had related to DEI implementation or outsourcing to low cost (read: illegal) domestic labor?

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They published and pushed a false "study" claiming diversity increases profits. CEO's ate it up

TXAGBQ76 said:

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$100K is pretty low

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Exactly! not even worth the effort of writing the paper.

KerrAg76 said:

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Mck can rot and go away. They destroyed our start-ups' core strenghts when they came in and told the CEO to off shore all manufacturing and out source all other work as possible. We went from vertical integration and high customer satisfaction to long supply lines and unpredictable delivery. Sold the business a few years later to a competitor

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Any start up that can afford McKinsey, does not need advice from McKinsey.

TXAGBQ76 said:

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$100K is pretty low

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McKinsey charges $250k per month for 2 junior analysts who are overseen by a part-time person with experience.

My experience was they had a larger team. I was told the fee was a seven figure one.

infinity ag said:

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BusterAg said:

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McKinsey should be making absolute bank on AI implementation right and left right now. The fact that they may not be is not a good look for them.

I wonder how many projects that had related to DEI implementation or outsourcing to low cost (read: illegal) domestic labor?

---

Unless things have changed in recent years, McK is known for advisory, not implementation. So basically they could say whatever they wanted to and just GTFO leaving implementation to someone else. If it failed, they just blamed the implementers.

More recently, the other top cos have started doing implementations.

---

They have been aggressively building what they need to do actual implementations, according to someone at a competitor of theirs in the space who would know

They are not the only ones who debunked the McKinsey study


https://www.wsj.com/finance/investing/diversity-was-supposed-to-make-us-rich-not-so-much-39da6a23

New research questions the methodology of a McKinsey study that helped create widespread belief that diversity is good for profits
---------------------------------------------


In an article for Econ Journal Watch, accounting professors Jeremiah Green and John Hand said that McKinsey & Company's studies that report a relationship between a company's profit and the ethnic diversity of executives should not be relied upon.

This company is a cancer, yet CEOs eat it up.


https://www.city-journal.org/article/mckinsey-and-companys-diversity-fog

Last year, McKinsey & Company released a study purporting to demonstrate that corporations with more diverse leadershipmore women and racial minorities in executive positionswere also more profitable. The consulting behemoth's findings were consistent with those of its previous three diversity studies, in 2015, 2018, and 2020, each of which had been cited across industries and government institutions as proof of the supposed financial benefits of race- and gender-conscious hiring policies. Now, a new paper raises questions about McKinsey's methodology and suggests that its advertised findings may have gotten the causation backward: financial success may lead corporations to embrace diversity efforts, rather than the other way around.

DCAggie13y said:

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KerrAg76 said:

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Mck can rot and go away. They destroyed our start-ups' core strenghts when they came in and told the CEO to off shore all manufacturing and out source all other work as possible. We went from vertical integration and high customer satisfaction to long supply lines and unpredictable delivery. Sold the business a few years later to a competitor

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Any start up that can afford McKinsey, does not need advice from McKinsey.

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We were about 10 years old. Had climbed the mountain and widely known and well regarded. But CEO #2 had to find ways to squeeze higher profits and find a way to leave his footprint not just the founder's. Screwed the pooch!!

It's just a matter of time before AI obsoletes them. Unless it's already started.

DCAggie13y said:

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TXAGBQ76 said:

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$100K is pretty low

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McKinsey charges $250k per month for 2 junior analysts who are overseen by a part-time person with experience.

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And some of it goes back to the "sponsor" (CEO or VP) in various ways.

Example
My wife's boss was an Indian woman, she was a VP. Not very competent, probably a DEI hire. She was leading a tech team and had no tech experience and didn't care to learn. She was more interesting in managing up which she did very well. She brought in many "consultants" from a company where her husband worked. I don't know if he owned it or what the connection was. She was also very intent on hiring Deloitte for some implementation work. She brought in many consulting companies to do presentations and would be rough on those companies but when Deloitte presented, she did not ask even one question. Then she wanted to give the contract to Deloitte and made the request to her boss, the COO. Who denied it saying not enough budget for now. That would have been a several million dollar contract. She had managed to give Deloitte several smaller contracts earlier.

Then she quit abruptly - "to spend more time with her family. What family? Her husband is a traveling salesman and her only son is in college. So my wife thinks she was fired or asked to leave because she did not deliver. She predicts she will join Deloitte because got them many contracts. The other thing is she also hired some Indian bodyshop companies and the gossip is she got kickbacks in India through transfer of cash and land.


Nice racket.