Episode summary
McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Sri Natarajan, Jennifer Rie, Zeke Faux, Drew Reading
Summary
McKinsey is confronting a slowdown that is forcing it to cut costs inside its own business. The host and Bloomberg News chief Wall Street correspondent Sri Natarajan said the firm is discussing cutting about 10% of headcount in non-client-facing departments, reflecting flat revenue growth after years of operating in a narrow band around $15 billion to $16 billion. The argument was that demand for traditional consulting is softer, clients are cost conscious, and McKinsey’s own prescriptions for streamlining are now being turned inward.
The conversation on Warner Bros. Discovery centered on regulatory risk, with Bloomberg Intelligence senior litigation analyst Jennifer Rie saying Paramount appears to face a less difficult antitrust path than Netflix. She said Netflix’s promises about keeping theaters open and avoiding overlap do not mean much unless they are memorialized, and that the Department of Justice would likely be the main reviewer. She also said worker impact and fewer buyers of content have become more important antitrust theories.
The episode also examined Bloomberg’s Big Take on Trump family memecoins, where investigative reporter Zeke Fox said the family made about $350 million of real profit and that the market has since faded. Later, homebuilder analyst Drew Reading said lower rates may lift orders in 2026, but fundamentals remain pressured by weak demand, price cuts, incentives, and margin compression.
Key takeaways
- Sri Natarajan said McKinsey’s leadership is weighing a 10% cut in non-client-facing headcount as revenue growth flattens.
- The host and Natarajan argued that consulting demand is weaker because clients are cost conscious and can trim advisory fees first.
- Jennifer Rie said Paramount poses less regulatory risk than Netflix because antitrust issues around Netflix are harder to defend.
- Rie said worker impacts and fewer buyers of content are now viable antitrust theories in media deals.
- Zeke Fox said the Trump family made about $350 million from memecoins, but the market has largely moved on.
- Drew Reading said 2026 should still be a tough year for homebuilders despite lower rates, with incentives and pricing pressure squeezing margins.
Notable quotes
“We will kick some ass as we start our second century”
“It realized that there was some bloat and the message that's percolating through the firm right now is it's time to get leaner”
“I think from an antitrust perspective, it would be paramount”
“Nothing. You really can't”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcast or watch us live on YouTube. You know what firm is celebrating 100 years?
What? McKenzie. Really?
Yeah. It's uh 100 years in business and of course they kind of invented the modern uh consultancy business overall. But what's interesting is of course the solutions that they tend to prescribe you know streamlining and cutting down staff and consolidating is something that they now need to do to themselves.
Okay. Shred Natarajin is Bloomberg News's chief Wall Street correspondent. He's been writing about this and Shri this all comes on the heels of a pretty I don't want to say disappointing but lackluster 5 years and that's that's probably the best way to describe it right any any companies that earns $15 billion a year you can't really look at their performance and say wow they're in terrible shape but around 2021 McKenzie had revenue at the $15 billion mark here we are in 2024 25 by the time this year ends we're going to be 16 billion just a little bit over so they've operated in this narrow band of $15 billion to$6 billion in annual revenue which is great.
Any other management consulting firm would absolutely love to post numbers like that. For for McKenzie it is a sense that their revenue has flatlined a little bit and you did mention their 100redyear celebrations right which 2026 that is when they will turn 100. So they had this annual partner gathering which also doubled up as this kickoff for their 100redyear festivities.
And for those who were there who listened to Bob Sternfelds, the global managing partner at McKenzie, the de facto leader, you could sense some plain spoken bravado.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- consulting layoffs
- netflix wbd deal
- regulatory concerns
- homebuilder outlook 2026
- memecoin investigation
Companies and tickers mentioned
- NFLX
- PARA
- McKinsey
- Netflix
- Warner Bros Discovery
- Paramount Global
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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