McKinsey cuts 10% of its workforce, the worst in a century! With the pandemic benefits fading and the rise of AI... high-paid white-collar workers also face survival challenges.

According to the Financial Times, McKinsey, a world-renowned management consulting firm, has laid off more than 10% of its workforce in the past 18 months, from 45,100 employees announced at the end of 2023 to about 40,000, one of the largest layoffs in McKinsey's nearly 100-year history. (Synopsis: AI eliminates bamboo engineers? Huang Jenxun shouts that "robots replace thousands of employees": eight Taiwan factories are introducing optimization) (Background supplement: AI really began to grab human jobs" Global manufacturers accelerate layoffs, American college students are unemployed after graduation. According to the Financial Times, McKinsey, a world-renowned management consultancy, has laid off more than 10% of its workforce in the past 18 months, from 45,100 announced at the end of 2023 to about 40,000, the largest layoff in the company's nearly 100-year history. Reasons for layoffs: fading pandemic dividends and the rise of generative AI The reasons behind McKinsey's layoffs are, on the one hand, that the consulting boom brought about by the coronavirus pandemic is fading, and on the other hand, the rapid rise of generative artificial intelligence (AI). First, the demand for consulting services has surged during the pandemic, McKinsey has grown its workforce by nearly two-thirds in the five years to 2023, and the business has expanded from core consulting services to larger-scale project implementations, driving the overall consulting industry to boom. However, as the pandemic dividend ended, voluntary employee turnover rates at professional services firms fell to historic lows, in stark contrast to the shift to higher-paying or more rewarding roles in the hot job market during the Great Resignation. The low turnover caught many companies off guard, prompting McKinsey to restructure its workforce and drive underperforming consultants to leave through rigorous mid-year performance reviews. At the same time, the introduction of generative AI is reshaping the consulting industry. Today's AI has evolved to automate junior tasks, such as data analysis and report generation, while boosting the productivity of other employees. McKinsey also confessed: "Generative AI has brought a new level of productivity to our team." The impact of AI on the consulting industry? Specifically, the impact of generative AI on the consulting industry may include: Task automation: Generative AI automates routine tasks for entry-level employees, such as data analysis, report generation, and basic research, reducing labor costs and increasing efficiency. Boost productivity: AI tools can help consultants quickly process complex data, generate insights, or simulate strategies to shorten project cycles. Changing workforce needs: As AI replaces some entry-level roles, consulting firms may reduce hiring of junior consultants and favor talent with AI application capabilities or high-level strategic thinking. EY: Leveraging AI for business growth However, it is worth mentioning that McKinsey's layoff strategy stands in stark contrast to its rival Boston Consulting Group (BCG). BCG's report last month showed that the company's global revenue grew 10 percent to $13.5 billion in 2024, and the number of employees increased by about 1,000 to 33,000, up from 30,000 two years ago, according to the Financial Times. In addition, Janet Truncale, global CEO of Ernst & Young (EY), said at this month's annual meeting of the Milken Institute that EY will not lay off employees due to AI, but use AI to improve efficiency. "I think we can double the size of our current workforce," she said. Related reports Hon Hai internal experiment: AI can replace 80% of jobs, chairman Liu Yangwei exposed the trinity blueprint of the future factory Polygon's core team third person left: co-founder Mihailo Bjelic left AI unicorn Builder.ai bankrupt! Microsoft, Amazon and other bright investments, but use outsourcing engineers to fake "automatic writing apps" (McKinsey layoffs 10% hit the worst in a century! The epidemic dividend fades, the rise of AI... High-paid white-collar workers also face the challenge of survival" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".