Bloomberg Intelligence Podcast

Episode: McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry
Date: December 15, 2025
Hosts: Scarlet Fu & Paul Sweeney
Featured Guest: Sridhar Natarajan (Bloomberg News Chief Wall Street Correspondent)

Overview

This episode centers on McKinsey & Company’s plans to cut thousands of jobs amid a challenging climate for the consulting industry. Hosts Scarlet Fu and Paul Sweeney, joined by Sridhar Natarajan, break down the forces behind McKinsey’s shakeup, the broader slowdown across global consulting, and what it signals for the industry’s future. Key topics include McKinsey’s flatlining revenues, reputational headwinds, the evolving value proposition of management consulting, and the impact of changing client demands—set against the backdrop of the firm’s 100th anniversary.

Key Discussion Points & Insights

1. McKinsey’s Stagnant Growth and Industry Context

• Revenue Plateau:
  • McKinsey’s annual revenues have hovered between $15B to just over $16B from 2021 to 2025—robust by most standards but flat for the industry’s leader.

    “Any company that earns $15 billion a year, you can't really look at their performance and say, wow, they're in terrible shape... They’ve operated in this narrow band of $15...to $16 billion in annual revenue. For McKinsey, it is a sense that their revenue has flatlined a little bit.”
    — Sridhar Natarajan [03:11]

• Consulting Industry Headwinds:
  • The entire consulting sector is experiencing reduced demand as clients tighten budgets and prioritize expense control.

    “The demand for traditional consulting services may not be as high as it used to be. Companies and clients are getting cost conscious... consulting fees are the first ones thrown out the window, right?”
    — Sridhar Natarajan [05:38]

2. McKinsey’s 100th Anniversary and Internal Messaging

• Notable Quote:
  • “We will kick some ass as we start our second century. … Those who say yes, I can assure you good times are ahead.”
    — Bob Sternfels (McKinsey Global Managing Partner), as paraphrased by Natarajan [03:28]
• Partner Gathering:
  • The company’s centennial partner meeting doubled as a kickoff for 100th anniversary celebrations but also delivered a candid diagnosis: the firm must get leaner in response to internal bloat.

3. Reputational & Geopolitical Challenges

• Recent Controversies:
  • McKinsey has faced distracting scrutiny from several high-profile scandals and controversial projects, including:
    • Involvement in the opioid crisis
    • Criticism over work for Chinese and Saudi entities
    • U.S. government work, notably with ICE
  • These have presented “unwelcome distraction” and complicated the firm’s internal and external messaging. [03:54]

4. Shift in Client Needs & the ‘McKinsey Playbook’

• Commoditization of Advice:
  • The firm’s trademark strategies—streamlining, consolidation, cutting costs—are standard fare across corporate boardrooms, reducing McKinsey’s perceived uniqueness.

    “At this point, what McKinsey recommends is kind of dogma in corporate boardrooms. You don’t need to hire McKinsey to tell you how to do some of these things.”
    — Paul Sweeney [06:16]

  • Natarajan refutes the idea that McKinsey simply recycles generic advice, pointing to repeat business with top-tier clients as proof of realized value.

    "It is an oversimplification... For these big companies to turn to McKinsey again and again tells you that they see value."
    — Sridhar Natarajan [06:26]

5. Global Shifts: China and Saudi Arabia

• China:
  • The government is urging companies to shift away from Western consultants in favor of homegrown firms to build domestic competitive capacity. [07:47]
• Saudi Arabia:
  • McKinsey’s business with Saudi clients, once a half-billion-dollar-a-year revenue stream, is now under pressure as the Kingdom retracts consulting spend, especially on ambitious but faltering ‘vision projects’.

    “Saudi Arabia had become one of McKinsey’s most important clients globally. ... they don’t necessarily see a lot of room for rapid growth.”
    — Sridhar Natarajan [08:16]

Notable Quotes & Memorable Moments

• On McKinsey's Outdated Playbook:

  “Anytime you bring a whiteboard, I’m out of there. I can’t think like it. So I went and traded stocks for a living after that.”
  — Paul Sweeney reflects on his own McKinsey interview experience [05:05]

• On the Practical Realities of Consulting Today:

  "In the moment, it might be funny, but to some extent it is an oversimplification of what they do... They're clearly doing something that companies value."
  — Sridhar Natarajan [06:26]

• On China’s Consulting Trends:

  “Good job relying on all of these Western firms to figure out how you need to modernize... but they are also encouraging them now to turn to homegrown consulting firms.”
  — Sridhar Natarajan [07:48]

Important Segment Timestamps

• [02:40] — Introduction to McKinsey’s centennial and job cuts
• [03:11] — Analysis of McKinsey’s financial performance
• [03:54] — Addressing the firm’s recent controversies
• [05:05] — Personal (irreverent) account of the McKinsey interview process
• [05:38] — Shrinking demand for consulting services and client budget shifts
• [06:16] — Commoditization of McKinsey’s advice; value debate
• [07:47] — Geopolitical landscape: Consulting in China
• [08:16] — Saudi Arabia’s retreat as a major client; consulting revenue impact

Takeaways

• McKinsey’s job cuts are a reaction to a plateau in revenue and reflect broader challenges in the consulting sector: changing global politics, client retrenchment, and the diminishing exclusivity of “consultant wisdom.”
• Despite headwinds, McKinsey maintains prestige and deep client relationships, with repeat business from the world’s largest firms and governments.
• The firm’s future will hinge on adapting its value proposition, distinguishing itself beyond cost-cutting, and navigating reputational and geopolitical complexities as it enters its second century.

For listeners seeking a deep dive into the current travails and future prospects of the consultancy world’s most storied name, this episode offers indispensable, plainspoken analysis.