Do we think this will happen if they do not have enough leaders/Rule of 70 take VSP? When do we think VSP & ISP will be offered to associates (non-leaders)?
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@d1 700-1300 feels about right out of 3k. You're also going to keep shedding people over the next 2 years as once the vendors are doing a bulk of the work you'll lose more of the support teams. If they sort out the bank partnership some people can shift while others will retire.
I agree. Do not trust the firm with anything they say. They have already shipped jobs to India. If they do that they can and will do anything for “the good of the firm”. Do what is best for you and your family. Do not worry about the firm. They are not worrying about us. If you leave make them pay you to leave. Good luck to everyone who are not making the decisions at the highest level.
They wouldn't have explained the difference between a VSP and ISP if it wasn't going to happen.
I think we can’t lose sight of this being only phase 1 in a 3 phase effort.
In my opinion, this round is about flattening the org and the leaders will bear the brunt of it. Lumping in Rule of 70 is just a convenience. They targeted them in the Ops round too.
I think associates need to be concerned about getting cut due to outsourcing or automation. That’s when the firm can replace you quickly and cheaply.
2026 & 2027 are the associate cutting years. 2025 is cutting leaders and GPs who might get in the way of the long term plan.
They claim the non-GP leaders and associates total percentage separated will be less than the total GP reduction of 15-20%. If true, would put us plebs (non-GP leaders and associates) somewhere in the 5-15% range for total overall gross reduction in headcount.
Let's also assume they're targeting a higher percentage of non-GP leaders than associates to be re-imagined. If that is true, I think a reasonable estimate would be a ~300-450 (10-15%) leader reduction.
If we assume the associate headcount reduction total percentage is less than the non-GP leader percentage, let's say 5-10%, that would be a ~300-600 total reduction in non-leader associates. I would guess they are hopeful many 'Rule of 70' VSP offers are taken, so that the ~300-600 associates number is satisfied or greatly reduced and they can avoid impacting another modest batch of associates.
Those assumptions would mean a total reduction in headcount of 6-12%, or ~600-1000, of non-GP leaders and associates.
Thoughts?
They are probably looking to offload 300-500 leaders. Based on Pennys comments during GP meeting, she mentioned associates will be affected significantly less. So 150ish? Speculating but that’s what I would broadly expect. At least initially, in 2-3 years they may do more if there is not enough organic attraction.
Also this is straight for McKinsey playbook, and these cuts often are aimed at chains of leadership which is where the impact will be the largest.
I don’t think anyone is sure at this point. This would be dependent on the number of leaders and associates that accept the VSP and the business needs of those department/teams. There is a lot that goes into these decisions for those associates faced with this decision, the # of associates the upper leadership team need to cut and business needs. All of the associates that take the VSP, if they are in an area that would not require cuts, these associates would need to be replaced and trained. My ‘guess’ is they would start with leadership ISP’s and then move to associates. This is just a guess. It is a scary time for all associates.
ISP will potentially happen for leaders if VSP does not produce what they are needing. They say they want to reduce leadership spans and layers so I would not think in this phase associates (no direct reports) would be considered at this point.