McKinsey Cuts 200 Global Tech Jobs, Plans to Automate some Positions Using AI

Consulting firm McKinsey & Co has cut roughly 200 global technology jobs in the past week, opting to use AI to automate certain roles, Bloomberg reported.

According to the report, the company has not ruled out additional reductions across several functions over the next two years as it expands its use of AI. McKinsey is closely evaluating which tasks can be handled by the technology.

“AI is enabling unprecedented levels of opportunity and impact for us and our clients,” a spokesperson told Bloomberg. “We are continually working to make our professional support functions more efficient and effective, including by taking advantage of AI.”

Scrutiny on Headcount

McKinsey employs around 40,000 people worldwide, including approximately 3,000 partners. Global Managing Partner Bob Sternfels told Bloomberg that the firm is focused on investing in client-facing roles while reassessing staffing in other areas.

“We are continuing to add folks who are client deployed,” Sternfels said in a Bloomberg television interview in September. “We will upskill folks more, we will probably have fewer people in non–client-deployed areas, but they will be leveraged by today’s technology and AI.”

The consulting industry as a whole is facing pressures from tighter corporate budgets and shifting government policies. McKinsey’s competitor Accenture Plc has reportedly said it expects US federal spending cuts on consultants to slow its growth next year, despite exceeding fourth-quarter revenue expectations.

During a September earnings call, Accenture CEO Julie Sweet told analysts that the firm is laying off employees who cannot be retrained, as it moves toward more automated, AI-driven work.

AI Challenges

Rapid advances in computing are creating workforce challenges across many industries, as AI makes certain positions obsolete. Bloomberg Intelligence estimates that global banks may cut up to 200,000 jobs over the next three to five years as AI replaces tasks traditionally performed by humans. JPMorgan Chase & Co CEO Jamie Dimon has consistently pointed to the opportunities presented by AI, even if it leads to fewer jobs.

Major banks have been experimenting with AI in recent years, encouraged by its potential to increase productivity and reduce costs. Citigroup Inc. has previously estimated that AI could add $170 billion to the banking sector’s earnings by 2028, with as many as 54% of roles having a high likelihood of being automated.