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McKinsey to Lay Off 10% of Staff amid AI Transformation

Management Consulting

McKinsey Cuts 10% Staff as AI Drives Shift Global!

Business Honor
23 December, 2025

Consultancy giant McKinsey restructures, citing AI and economic pressures as key factors behind layoffs.

One of the world’s most renowned management consultancies, McKinsey & Company, is preparing for significant layoffs as the adoption of artificial intelligence is rapidly transforming the consultancy industry’s dynamics. It is reported that McKinsey is considering layoffs of approximately 10% of its staff within the next 18 to 24 months, which is expected to go up to 2027. These layoffs will be primarily in non-client service-related positions.

This is also part of the current trend of restructuring at the firm. Later in 2023, McKinsey had announced Project Magnolia, cutting about 2,000 back-office workers. However, this is also expected in 2024, as it is reported that 360-400 staff members in the technology field, including data engineering, cloud, development, and design, have also already had layoffs. More recently still, it is reported that 200 tech-related roles have been cut amid the increased use of AI.

Artificial intelligence is one such major driving force, but it is not the only reason for this shift. The management consulting industry as a whole is experiencing uncertain economic conditions, geopolitical challenges, and cautious corporation, which all contribute towards a decrease in the demand for management consulting. McKinsey is experiencing flat growth in revenues and increased competition from AI-based consulting platforms, which provide a similar output at a cheaper rate.

Nonetheless, McKinsey has noted that the layoffs do not extend to the company's client-facing consultant hires. This focus is an indicator of the importance of human cognition and strategic thinking. As McKinsey celebrates its upcoming 100 years, the change within its company shows that the industry is also transforming. Consultants face changes within their organization that they also recommend. The move by McKinsey can actually act as a signal for the entire management consulting sector, indicating that lean support infrastructure may soon become the new standard.