(Bloomberg) -- McKinsey & Co. warned some US consultants last week they are running out of time to win promotion, raising the “up or out” pressure on staff as the global consulting industry struggles.

The memos were sent to some engagement managers and associate partners in North America, reminding them staff in this role have an average of two and a half years to be promoted, people familiar with the matter said. It’s the latest sign that McKinsey may be rethinking its staffing following several years of aggressive hiring and low attrition rates. 

“We have always maintained a high bar for performance,” according to a statement from McKinsey. “We routinely refine our approach to development and performance to ensure we continue to meet these goals, and we continue to recruit and hire robustly.”

Last month, the senior partners reelected Global Managing Partner Bob Sternfels for a further three years, at a time when the consulting industry is facing a slowdown in client activity, public scrutiny and economic headwinds — although McKinsey said it generated a record $16 billion in revenue last year. 

In February, Sternfels penned a note in which he wrote “estamos juntos,” meaning “we’re together,” in order to boost staff morale, the people said, asking not to be identified as the details are private. 

The timeline for promotions varies by employee and those who took periods of absence will not be negatively impacted, one of the people said. In some instances, employees who got the memos are receiving offers for payouts should they choose to leave McKinsey ahead of their reviews in the coming months, the people added.

The “up or out” policy is an approach used at many global consulting firms, where it’s expected that employees are promoted within a specific time-frame or exit.

Consultants including Accenture Plc and Ernst & Young LLP have trimmed headcount to rein in costs in the past year or so, marking the end of a hiring boom that was driven by corporations racing to make changes in the wake of the Covid-19 pandemic. Deloitte UK is poised to cut another 100 consulting jobs amid a prolonged slowdown in corporate deal activity, the firm said earlier this year. 

Last year, McKinsey embarked on a plan to eliminate about 1,400 roles. Most of the affected employees didn’t have direct contact with clients and were focused on support functions. Still, it was a departure from the firm’s usual reluctance to cut staff, instead relying on underperforming workers being “counseled to leave.” 

McKinsey has more recently warned about 3,000 consultants that their performance was unsatisfactory and would need to improve, Bloomberg News reported in February. The firm gave these employees a so-called “concerns” rating as part of their performance reviews in recent months. Those employees are typically given about three months to show improved performance before they are advised to exit. 

The company, which has also been battling fierce political backlash in the US for its work in Saudi Arabia and China, has about 45,000 employees around the world, up by about 60% since 2018. It’s advised everyone from the US Pentagon to China’s Ping An Insurance (Group) Co.

--With assistance from Amy Bainbridge.

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