When McKinsey Comes to Town

Does McKinsey make the world better—or simply protect the powerful at any cost?

1. The High Price of Efficiency

McKinsey claims to help corporations and governments achieve efficiency and innovation. Yet, its methods often result in mass layoffs, dangerous cost cuts, and broader negative outcomes. For example, the firm became synonymous with aggressive cost-cutting measures that slashed safety budgets in workplaces like US Steel, leading to fatal accidents.

The story of US Steel underscores this approach. Tasked with reviving the struggling company, McKinsey prioritized layoffs and maintenance cuts over sustainable reform. The short-term stock rise quickly gave way to grievous consequences, including two worker deaths from electrocution following the cuts. Despite employee protests, McKinsey avoided accountability.

The pattern repeated at Disneyland, where recommendations to reduce safety costs led to fatal accidents on rides. Once again, McKinsey faced no repercussions. These outcomes suggest McKinsey’s concept of improvement is limited to enhancing bottom lines, often at the expense of worker safety and community welfare.

Examples

• Fatal accidents caused by McKinsey-driven budget cuts at US Steel.
• Reduced maintenance measures at Disneyland resulting in ride-related deaths.
• Frequent layoffs framed as "increased efficiency" across industries.

2. Profits Over People

McKinsey operates on a foundation prioritizing profit above all else. From as early as the 1950s, the company has championed the cause of the elite. Whether it’s endorsing shifting wealth toward CEOs or dismantling union power, McKinsey’s actions have perpetuated income inequality.

One stark case is its work for General Motors in the 1950s, where it advised reversing trends of rising worker wages in favor of heightened executive compensation. This mentality evolved over decades into advocating offshoring jobs and weakening labor unions. By 2020, CEO-to-worker pay ratios ballooned to an astonishing 351 to 1, thanks in part to McKinsey’s initiatives.

Moreover, McKinsey promotes projects regardless of their moral implications. Internal guidelines suggest consultants can refuse unethical assignments, but those who do face stalled careers. With such policies, profits unfailingly come first.

Examples

• Dismantling worker-friendly trends at General Motors in the 1950s.
• Advocacy for outsourcing jobs to underpay workers globally.
• Supporting increased executive compensation even during periods of extreme income disparity.

3. Corruption in Government Contracts

McKinsey isn’t confined to boardrooms—it advises governments on sensitive public policies. Yet, often, it uses insider connections to secure lucrative, uncompetitive contracts, providing questionable results. Take Medicaid. By leveraging ties, McKinsey gained contracts in states like Illinois, Arkansas, and Missouri, but left local hospitals underfunded and poorly equipped despite millions in state spending.

More controversially, McKinsey has supported agendas many view as unethical. For example, its work with the FDA involves both consulting drug companies and the agency regulating them, creating conflicts of interest. Moreover, during Trump’s presidency, McKinsey advised ICE on cost-cutting immigration policies, suggesting even lower detention-center food standards.

McKinsey counters critics by emphasizing its detachment from politics, but evidence shows its actions often exacerbate governmental inefficiencies and ethical dilemmas.

Examples

• Securing $75 million in Medicaid contracts in Illinois while hospitals remained underfunded.
• Conflicted roles consulting for FDA while aiding pharmaceutical companies.
• Advising ICE to cut food standards in detention centers, risking humanitarian issues.

4. Endangering Public Health

McKinsey’s relationship with harmful industries like Big Tobacco and Big Pharma reveals its complicity in public health crises. Beginning in the 1950s, McKinsey aided tobacco giants, helping them market their carcinogenic products. Even after smoking’s health risks became indisputable, the firm continued with campaigns targeting teens and minorities.

But the more shocking revelation is McKinsey's role in the opioid epidemic. It guided Purdue Pharma to boost OxyContin sales, even suggesting strategies to counteract pharmacies attempting to curb dangerous distribution practices. McKinsey didn't just advise Purdue—it tragically amplified one of the deadliest drug crises in US history.

Meanwhile, McKinsey worked discreetly with regulatory agencies like the FDA, ensuring minimal obstacles for the same companies it aided, exposing a massive conflict of interest.

Examples

• Crafting ad strategies for tobacco companies aimed at teens and minority groups.
• Recommending targeted opioid distributions to areas already hit hardest by addiction.
• Working both for Purdue Pharma and the FDA simultaneously during the opioid crisis.

5. Fuelling the 2008 Financial Crisis

Wall Street has long relied on McKinsey’s financial expertise, but much of its advice has led to disaster. Starting in the 1980s, McKinsey encouraged banks to adopt "securitization," a risky practice of bundling loans into tradable securities. Despite its shiny veneer, this method promoted unchecked speculation.

During the lead-up to the 2008 financial crisis, McKinsey veterans occupied leadership positions at firms including Lehman Brothers and Morgan Stanley, which had embraced and expanded securitization. This practice enabled the proliferation of subprime mortgages, which became a central ingredient in the global economic collapse.

While millions of Americans lost their homes and jobs, McKinsey distanced itself by claiming its securitization suggestions involved "different instruments," avoiding accountability and deflecting blame.

Examples

• Pioneering widespread securitization strategies in the banking world during the 1980s.
• Former McKinsey consultants spearheading risky financial practices that caused collapses like Lehman Brothers' in 2008.
• Publishing promotional guides that normalized practices leading to global economic instability.

6. Collaborating With Authoritarian Regimes

McKinsey’s willingness to work for authoritarian governments reveals another side of its moral compromises. Its ties to Saudi Arabia’s oppressive regime demonstrate how the firm aids repression under the guise of consulting services. For instance, McKinsey advised Saudi leaders during the Arab Spring uprisings, suggesting limited reforms combined with increased crackdowns.

Similarly, its involvement in South Africa saw advisors working with corrupt officials to mishandle state-run energy and rail organizations like Eskom and Transnet. This led to widespread infrastructure failure, blackouts, and public unrest.

McKinsey’s ultimate defense often revolves around its role as an "impartial advisor." Yet, time and again, its actions prop up dictators and corrupt regimes.

Examples

• Guiding Saudi Arabia on suppressing dissent during the Arab Spring.
• Collaborating with corrupt firms in South Africa, leading to lasting energy crises.
• Hosting a company retreat near Uyghur detention camps in China.

7. Greenwashing Sustainability

McKinsey frequently positions itself as a champion of sustainability, yet continues working extensively with major fossil fuel companies. By advising oil and coal firms on ways to expand production, McKinsey helps polluters amplify their environmental impact.

Young consultants drawn by McKinsey's sustainability promises have expressed disillusionment. Former employee Erik Edstrom recounted how coal-mining projects were celebrated internally, including motivational videos that glorified increased coal output rather than reductions.

Despite employee pushback, McKinsey has resisted shifting toward green energy work. Its public climate promises remain a mask for business as usual.

Examples

• Assisting Indonesian coal exporters in expanding their market reach.
• Creating motivation campaigns around increased coal production for clients.
• Failing to engage major clean energy firms as clients as of 2020.

8. Protecting Its Veil of Secrecy

McKinsey thrives on confidentiality, which shields it from scrutiny and makes accountability rare. This secrecy extends to hiding client relationships, ensuring whistle-blowers face immense challenges in exposing the firm’s practices.

This culture of silence allows McKinsey to deny its role in large-scale failures, from opioid deaths to financial collapses, deflecting responsibility to other entities. It also prevents meaningful reform.

Despite growing media exposure, McKinsey continues to defend its practices by emphasizing its consultant-client confidentiality agreements. This strategy silences internal and external voices.

Examples

• Secretive operations surrounding its role in the opioid epidemic.
• Hidden dealings with authoritarian governments like China's and Saudi Arabia’s.
• Evasive responses to conflicts of interest in the FDA and Big Pharma.

9. A Hollow Ethical Core

McKinsey markets itself as a noble force for good, but its actions repeatedly betray these proclamations. From advising corrupt governments to fueling economic inequality, the firm’s agenda consistently prioritizes profit over ethical solutions.

McKinsey often claims it operates under high moral standards, even allowing employees to opt out of unethical projects. However, this so-called policy has proven ineffective, punishing those who resist controversial clients or industries.

Ethical branding, paired with its luxurious image, attracts ambitious recruits. But over time, many consultants—disheartened by the gap between values and actions—leave McKinsey.

Examples

• Publicly promoting "purpose-driven work," while heavily engaging fossil fuel clients.
• Punishing consultants who refuse certain projects by freezing career advancements.
• Drawing new talent with misleading promises of making a positive global impact.

Takeaways

1. Investigate the lasting impacts of consulting firm decisions before hiring them.
2. Advocate for transparency in corporate and governmental engagements with large organizations.
3. Prioritize human and environmental costs when assessing business recommendations.