U.S.-based consulting firm McKinsey is restructuring its operations in China following a decrease in government-related clients and the elimination of approximately 500 positions, which constitutes about one-third of its workforce in the region, as reported by the Wall Street Journal on Wednesday.

According to sources familiar with the situation, the firm is isolating its China division from its global operations to mitigate security concerns associated with conducting business in the country.

Over the past two years, McKinsey has significantly downsized its workforce in Greater China, which includes Hong Kong and Taiwan, by hundreds of employees. As of June 2023, the firm had nearly 1,500 employees listed on its Greater China website, the report noted.

McKinsey has not provided a response to a Reuters inquiry for comment outside of regular business hours.