Joining other major consulting firms looking inwards to identify opportunities for change, McKinsey is contemplating job cuts across its workforce. Emerging reports indicate that the McKinsey layoffs could affect nearly 10% of its non-client-facing staff, with the motivation for the cuts coming from interests in AI and automation. After the slew of layoffs that have occurred this year, the layoff rumors at McKinsey are unsurprising, but they do solidify the possibility of the job market facing continued disruption in 2026.
McKinsey job cuts predicted for 2026 as the business prepares to face the industry slowdown head-on with investments in AI and automation. (Image: Freepik)
McKinsey Job Cuts Announced for 2025-2026: Automation and AI Lead the Way
McKinsey has built itself up as a top advisor for businesses contemplating change, and this has included recommendations on how an organization can reorganize its workforce. Turning its expertise towards its own business, McKinsey is set to explore layoffs that could result in a 10% reduction in its headcount in some areas, primarily affecting “a few thousand” non-client-facing roles.
The decision is expected to affect an array of jobs over the next 18 to 24 months, according to Bloomberg. No fixed numbers have been revealed for the McKinsey job cuts, and neither has the company publicly identified which departments in particular will take the biggest hit.
“As our firm marks its 100th year, we’re operating in a moment shaped by rapid advances in AI that are transforming business and society,” a McKinsey spokesperson explained to The Times. “Just as we’re partnering with clients to strengthen their organizations, we’re on our own journey to improve the effectiveness and efficiency of our support functions.“
As McKinsey weighs job cuts alongside potential gains from artificial intelligence, the company is only one example of a consulting giant treading down the path of technology to optimize its business.
AI Layoffs Among Consulting Firms Are Not a New Proposition
The passing year of 2025 has been an odd one for more reasons than one. From the Times magazine naming the Architects of AI as the “Person of the Year,” to CEOs simultaneously celebrating and warning against AI, we have been presented with a platter of opinions on the potential of AI, with little evidence to support its revolutionary powers. Despite this, most businesses in the public eye have doubled down on the technology as the real game-changer, actively investing in cutting down their ranks to reap the benefits promised by the technology.
Just like its competitors, McKinsey has already introduced an AI chatbot into its operations, relying on its Lilli tool to the same degree that PwC has with ChatPwC, or KPMG has with KymChat. The Lilli tool is designed to simplify the process of seeking and accessing information, drawing on internal resources to bring relevant material to the surface. While the consulting giant has been satisfied by this advancement, there are likely more areas of deployment that have gone unexplored thus far. It is not alone in this assessment.
After an ill-timed rebrand, PwC abandoned its ambitious hiring target and announced its decision to slow down on bringing in talent, choosing to downsize and reorganize its existing labor force instead. Tax and strategy consulting firms like KPMG, Deloitte, Bain & Company, and Accenture have similarly laid off workers in 2025, shifting attention towards redesigning the workforce with AI in mind.
As McKinsey Contemplates White Collar Cuts, the Future of Employment Grows More Confusing
McKinsey’s job reduction plans are understandably more complex than just laying the blame on AI. The company has seen a considerable growth in its ranks after its multi-year hiring spree that brought its number up to above 45,000. Now, its headcount has been brought down to 40,000 workers, but its revenue gains have seemingly stalled.
Consulting firms are no longer seen as essential to business operations, particularly with organizations turning to AI and their own internal expertise to determine their game plan. This means that businesses that provide consulting services now have to adapt to maintain their relevance, ensuring a more clever approach to AI than businesses have on their own. As a result, technology now emerges as both the problem and the solution, and employees have no choice but to build relevant skills to ensure their presence remains critical to the workplace as well.
Workers in some industries have been quicker to adopt the technology than others, but there has been an overall shift across fields that are distantly tied to the tech as well. A reduction of headcount may be the top solution to address the shift, but it is far from the only one. As more employees express a clear desire to work with the technology, it is up to businesses to invest in training and upskilling to make the most of the emergence of AI.
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