According to Inc, McKinsey & Company recently announced a plan to cut roughly 10% of its workforce. This isn’t being framed as a one-off cost-cutting measure but as a strategic response to a permanent industry shift. The core argument is that the AI age is eroding the firm’s foundational advantage. For decades, that advantage was built on hiring elite analytical talent to solve complex problems with scarce information. Now, AI tools are rapidly democratizing those very analytical and recommendation capabilities. This layoff round is seen as a direct signal of that irreversible change.
The Real Existential Threat
Here’s the thing: consulting firms have faced disruption before. The digital age challenged them, and they adapted by building big data and analytics practices. But AI is different. It doesn’t just change the tools; it attacks the business model’s heart. McKinsey’s moat was always its brainpower—its ability to take a messy business problem, apply rigorous analysis, and deliver a “right” answer that clients would pay millions for. What happens when a competent manager with a ChatGPT Enterprise subscription can generate 80% of that initial analysis in an afternoon? The premium for pure analysis collapses. That’s the commoditization Inc is talking about, and it’s terrifying for the industry.
Stakeholders In The Crosshairs
So who gets hit by this? First, the junior consultants and analysts. A huge chunk of their work is data gathering, synthesis, and slide deck creation—tasks that are incredibly susceptible to AI automation. These layoffs probably won’t be the last. For clients (the enterprises), this should be a wake-up call. The value of a consulting engagement will have to shift from “what is the answer?” to “how do we implement and manage the change?” Strategy work that isn’t tied to tangible execution will look like a luxury. And for the market? We’re likely to see a brutal consolidation. Smaller boutique firms that specialize in very deep, niche expertise or hands-on implementation might actually thrive. The mega-firms that can’t pivot beyond analysis are in for a rough decade.
The Future Is Implementation
Where does that leave a firm like McKinsey? The path forward is brutally clear, but also brutally hard. They have to move further down the execution chain. It’s no longer enough to deliver a beautiful report. The value will be in managing the complex, human-heavy process of organizational transformation—the part AI can’t do. This means deeper, longer-term partnerships with clients, maybe even taking on shared risk. It also means their own talent profile needs to change. They’ll need more seasoned operators and change managers, and maybe fewer straight-from-campus whiz kids. Basically, they have to stop selling intelligence and start selling guaranteed outcomes. That’s a whole different game, and one their traditional partnership structure might resist. Can a firm built on analysis reinvent itself as a firm built on execution? That’s the billion-dollar question.
