As McKinsey & Co. approaches its centennial, the consulting behemoth finds itself charting unfamiliar waters. In late October, during a gathering of partners in Chicago—the firm’s historic birthplace—global managing partner Bob Sternfels issued a bold call to action: “We will kick some ass as we start our second century.” Yet, behind the motivational rhetoric, executives are quietly orchestrating a significant workforce reduction, signaling deeper troubles in the consulting sector. According to reports, McKinsey is contemplating cuts of around 10% of its headcount, potentially affecting thousands of employees in non-client-facing roles. This move comes amid a broader industry downturn, where demand for high-end advisory services has cooled after years of post-pandemic boom.

The planned layoffs, detailed in a recent Bloomberg article, underscore a shift from the firm’s aggressive expansion. McKinsey, with its roughly 45,000 employees worldwide, has long been a bellwether for white-collar professions. The reductions target support functions, aiming to streamline operations as revenue growth stalls. Insiders note that while client-facing consultants may be spared, the cuts reflect a strategic pivot to maintain profitability in a tightening market. This isn’t McKinsey’s first brush with downsizing; earlier in 2025, the firm eliminated about 200 roles, shifting some tasks to artificial intelligence, as reported by The Information.

Broader economic pressures are exacerbating the slowdown. Clients, ranging from Fortune 500 corporations to governments, are reining in spending on external advisors. Factors include persistent inflation, geopolitical tensions, and a reevaluation of consulting’s value proposition in an era of rapid technological change. For McKinsey, which derives much of its revenue from strategy and operations advice, the dip in demand has been particularly acute. Recent data from industry analyses suggest that global consulting revenues grew by only 2-3% in 2025, a stark contrast to the double-digit surges seen in 2021-2023.

Industry-Wide Ripples from Economic Headwinds

The consulting sector’s challenges extend beyond McKinsey. Rivals like Ernst & Young (EY) and PricewaterhouseCoopers (PwC) have already implemented substantial layoffs over the past two years, trimming staff to align with reduced client budgets. Accenture, another major player, has cited U.S. President Donald Trump’s policies on federal contracting as a drag on revenue, with directives to curtail consultancy spending in government agencies. In China, heightened scrutiny of foreign firms has further constrained opportunities, forcing consultancies to navigate regulatory hurdles that limit their advisory roles.

Social media platforms like X (formerly Twitter) have buzzed with reactions to these developments. Posts from industry observers highlight a sentiment of unease, with one user noting that McKinsey’s moves signal “the end for MBA consultants” amid revenue stagnation. Another post from earlier in 2025 referenced the firm’s decision to cut jobs and integrate AI, framing it as part of a larger trend where technology displaces traditional roles. These online discussions, while anecdotal, reflect growing anxiety among professionals about job security in what was once considered a recession-proof field.

At the heart of this contraction is a fundamental question: Is consulting’s golden era waning? For decades, firms like McKinsey thrived by embedding themselves in corporate decision-making, offering insights on everything from digital transformation to supply-chain optimization. But as companies build internal capabilities—bolstered by accessible data analytics and AI tools—the need for expensive external expertise diminishes. A Semafor report emphasizes this point, noting that cost-conscious clients are increasingly handling advisory work in-house.

AI’s Role in Reshaping Consulting Operations

Artificial intelligence is accelerating these changes, acting as both a disruptor and a potential savior for the industry. McKinsey’s own reports have touted AI’s transformative potential, yet the firm is now applying it internally to automate routine tasks. In November 2025, posts on X highlighted McKinsey’s findings from its annual survey: While 88% of companies claim to use AI, over 80% report no significant bottom-line impact, suggesting much of the adoption remains superficial. This “AI theater,” as one poster described it, masks the reality that many pilots never scale, leaving consultancies to sell hype rather than results.

For McKinsey, integrating AI means redefining roles. The firm’s earlier job cuts in 2025, as covered by Bloomberg, involved shifting analytical work to algorithms, reducing the need for junior staff. This mirrors actions at peers; Deloitte, for instance, has undergone significant reductions, with reports indicating a focus on AI-driven efficiencies. Industry insiders argue that while AI enhances productivity, it also commoditizes certain services, eroding the premium pricing that consultancies command.

The human element remains crucial, however. Consultants bring not just data but judgment, relationships, and bespoke strategies that AI struggles to replicate. Yet, as firms like McKinsey trim support staff, there’s a risk of overburdening remaining employees, potentially leading to burnout and talent flight. Recruitment has already slowed; McKinsey’s partner class was notably smaller in recent promotions, a trend echoed in X posts from 2023 that flagged early warning signs of economic caution.

Geopolitical and Regulatory Pressures Mounting

Geopolitical factors are compounding the slowdown. In the U.S., the Trump administration’s push to reduce federal reliance on consultants has ripple effects. Accenture’s revenue warnings, linked to curtailed government contracts, illustrate how policy shifts can cascade through the sector. Meanwhile, in China, state directives scrutinizing foreign advisors have limited market access, as detailed in various reports. This dual squeeze—domestic austerity and international barriers—forces firms to pivot toward emerging markets or niche areas like sustainability and cybersecurity.

McKinsey’s response includes a focus on high-growth domains. Despite the cuts, the firm continues to invest in areas like quantum computing and climate advisory, betting on long-term demand. However, short-term pain is evident. A Quartz analysis points out the symbolic weight of McKinsey’s actions, given its influence in shaping corporate America. The layoffs signal that even elite white-collar jobs aren’t immune to economic cycles.

Employee morale is another undercurrent. Anonymous posts on X from consultants describe a shift from optimism to pragmatism, with some speculating that the cuts could reach deeper into client-facing teams if demand doesn’t rebound. McKinsey’s leadership, under Sternfels, has emphasized resilience, but internal communications reportedly acknowledge the need for “leaning out” to weather the storm.

Strategic Pivots and Future Trajectories

Looking ahead, McKinsey and its peers must adapt to a more volatile environment. Diversification into technology-driven services, such as AI implementation and data governance, could offset traditional advisory declines. Yet, competition from boutique firms and tech giants like Google and Amazon, which offer consulting-like services, intensifies the pressure. A Straits Times piece highlights how McKinsey’s planned reductions target non-core functions, preserving expertise in high-value areas.

The industry’s cyclical nature is coming into sharper focus. Historical precedents, like the post-2008 financial crisis when consulting firms slashed staff, suggest recovery is possible but not immediate. McKinsey’s centennial celebrations, meant to mark triumph, now serve as a backdrop for introspection. As one X post from December 2025 quipped, when the strategists apply their own cost-cutting advice internally, it reveals the depth of the challenge.

Talent management will be key. With layoffs looming, attracting top graduates becomes harder. Universities report fewer applications to MBA programs tied to consulting careers, influenced by news of instability. McKinsey has historically lured Ivy League talent with promises of impact and prestige, but recent events may erode that allure.

Lessons from Past Downturns and Emerging Opportunities

Drawing from previous slumps, consultancies have bounced back by innovating. Post-dot-com bust, firms like McKinsey expanded into emerging economies and digital strategies. Today, opportunities lie in advising on AI ethics, supply-chain resilience amid trade wars, and regulatory compliance in a fragmented global market. However, execution requires agility—something large firms sometimes lack.

Critics argue that over-reliance on billable hours and short-term projects has left the industry vulnerable. A more sustainable model might involve outcome-based pricing or long-term partnerships, reducing exposure to economic fluctuations. McKinsey’s internal AI shifts, as noted in earlier coverage, position it to lead this evolution, but at the cost of current workforce adjustments.

The broader implication for white-collar workers is profound. If McKinsey, a symbol of professional aspiration, is cutting deep, it portends wider instability. Posts on X from industry veterans warn of a “brutal” 2025, with AI accelerating job displacement. Yet, optimism persists; Sternfels’ rallying cry hints at a firm ready to reinvent itself for another century.

Navigating Uncertainty in a Changing Field

As the consulting world grapples with these headwinds, stakeholders—from employees to clients—must recalibrate expectations. For McKinsey, the planned cuts are a pragmatic response, but they also invite scrutiny of the firm’s vaunted culture. Reports from Capital Brief estimate the reductions could affect up to 4,500 roles, based on the 10% figure. This scale underscores the urgency.

In Asia, where McKinsey has significant operations, the slowdown intersects with regional dynamics. The People Matters outlet reports flat growth prompting trims in support functions, aligning with global trends.

Ultimately, McKinsey’s maneuvers reflect a sector in transition. By leveraging its legacy while embracing innovation, the firm may emerge stronger. For now, though, the cuts serve as a stark reminder that even the architects of corporate strategy aren’t exempt from market forces. As discussions on X evolve, they capture a mix of concern and adaptation, painting a picture of an industry poised for reinvention amid adversity.