Morning Coffee: McKinsey & Co's job cuts seem very gentle vs. Goldman Sachs'. Citi's cost cutting comes to London, again
This time last year, McKinsey & Co proposed to cut 2,000 jobs and there was much lamenting. It would be one of the largest round of cuts in McKinsey's history, said the Financial Times, amounting to 4% of the consulting firm's staff, it added. Now, though, McKinsey & Co is making an even bigger round of cuts: Bloomberg reports that 3,000 people there could go.
While this may be a shock to people at McKinsey & Co, the consulting seems surprisingly gentle in its ways. The unwanted staff will be given an opportunity for redemption. Bloomberg reports that they have been handed a 'concerns' rating and have three months to improve their performance. Only at the end of that period will they, potentially, be let go. And even then, it won't be a harsh exit: they will be "counseled to leave," in McKinsey parlance.
Although it ends at the same destination, McKinsey & Co's layoff methodology doesn't sound all that bad. When Goldman Sachs let people go earlier this year, people at their desks received a call to attend a meeting with HR and were then escorted from the building. When Rothschild ejected people recently, some people complained of being informed by email. Being fired by McKinsey sounds quite ok by comparison.
Of course, it's conceivable that it's not really that nice being ejected by McKinsey & Co. and that the way out is simply filled with procedural euphemisms that lead to the inevitable. McKinsey is, of course, a specialist in cutting jobs at its client firms. Just ask people who left Credit Suisse.
Separately, Andy Sieg, the man tasked with improving the return on equity in Citigroup's wealth management division to something more than 2.6%, has turned his attention to London.
Bloomberg reported yesterday that Sieg is considering cutting 51 people, or 10% of staff, in Citi's UK wealth management division. The considered cuts apply to everyone from assistant vice president to director level, and seemingly not to MDs. It's not clear whether everyone there will be given three months to improve their performance first, but it seems unlikely. Citi has already made a few rounds of cuts in London and while people there weren't given a chance of redemption, they were at least given one month's severance pay for every year of service.
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