KPMG is laying off 5% of staff. Should we expect something similar at other firms, including MBB? Or if not layoffs, other measures (e.g. delayed start dates, unpaid leaves etc)?
(editiert)
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:
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
Hi there,
There is definitely a potential for further layoffs.
Already at the moment, there is a large number of consultants on the beach. A former client of mine reached out recently and told me that in his MBB there are more than 1,000 juniors on the bench…
I heard stories from McK Europe in 2008/09 where people were let go after a couple of months on the beach + higher ranks in the company were not promoted (=counseled to leave).
What I am currently seeing across my network are three things:
1. Hiring stop or significant slowdown
2. Harder to get through the resume screening (related to 1)
3. A lot of people on the beach
Cheers,
Florian
Hi there,
Please remember that these layoffs pale in comparison to the hiring of 2022. Media loves headlines.
Of course we are in a bit of a slowdown. You should expect some other measures as you ahve indicated (for example, we have see a slowdown in hiring).
Hi there,
It's impossible to predict these things, as you might expect.
Consulting firms tend to be rather resilient and adaptable in these situations and fortunately they still have clients regardless of whether the economy is doing well or not.
Also remember that all these layoffs also depend on the geography that you're in. In countries such as Germany these things almost never happen because of tough labour laws, whereas in the US they tend to be more common.
Best,
Cristian
Hi,
Historically, as far as I know, MBB (at least BCG) did not lay off consultants during the GFC in 2008 2009. Neither did BCG lay individuals off during Covid.
In fact what happened during the GFC was that some firms slowed down hiring so much that some offices did not have enough capacity when business picked up again post-crisis.
What I expect to see and what I have heard anecdotally is:
Hi Benjamin, I heard stories from McK Europe in 2008/09 where people were let go after a couple of months on the beach + higher ranks in the company were not promoted (=counseled to leave). Cheers, Florian
Hi Benjamin, indeed, there have been layoffs (or the European version of it, being asked to leave) during the great financial crisis. However, maybe this was not the case for SEA and as such, you didn't know.
Most big Consulting companies will lay off or are already laying off staff. Contractors, underperformers or those on the bench for a long period (>6-9 months) will be the first ones to go→ I know through my network that EY is doing the same.
A lot of this is also done quietly specially in partnership firms vs public firms (e.g. Accenture). When the lay off numbers are big (>5%) they have to annouce to the market.
Its the sad reality of capitalism (relentless focus on profits and share price) and the unstable economic conditions.
Its very difficult to generalise this in every office and every country as you can imagine, but broadly what I have said is true.
Hello,
It would just be taking a guess to predict the future. But looking at the trend from KPMG and more recently McKinsey, one could argue that this is a consequence of over-hiring soon after the pandemic.
Also, keep in mind that McKinsey has laid off their back office employees. Further, these are incidents that have happened in mature markets, not in emerging markets like Asia / Middle East - where hiring is still strong, albeit relatively slower than expected.
Best,
Rushabh
Delaying interviews or the starting date for employment offers, definitely.
Delaying start dates (where there are already agreed upon start dates) unlikely for MBB/Tier 2.
Layoffs for strategy consulting firms, not really (for non consulting staff, yes; for consulting staff no). The reason is that rotation is quite high for consultants. They manage the total number of people mostly from adjusting recruiting (fresh grads and experience hires - and the experience hires are the first to be delayed) and through a bit more aggressive up or out (but this is not the most important tool).
