Consultants are facing the awkward task of researching AI-driven job cuts within their own industry. \ufeffLast week, a Mc\ufeffKinsey report found that job vacancies in the UK economy \ufeffhave fallen by 43% since 2022, with the decline in postings for white-collar jobs nearly twice \ufeffthat seen elsewhere.<\/p>\n
Across the professional services sector there\ufeff is a dawning realisation: the disrupters have become the disrupted. A many-sided crisis in consulting includes the replacement of entry-level and graduate roles with AI, a reduction in spending on consultants by governments\ufeff and reputational problems linked to\ufeff companies\u2019 work, whether it\ufeff is marketing for opioids \ufeffor drawing up reconstruction plans for warzones.<\/p>\n
Rightsizing, as \ufeffcompanies prefer to call it, was inevitable after the post-Covid consultancy boom was punctured by sluggish growth and higher borrowing costs. But recent data shows \ufeffthe ability of agentic AI \u2013 agents that can make decisions and take actions on our behalf \u2013 to knock together a passable PowerPoint presentation or research document has caused severe attrition \ufeffof roles at the lower end of the pay scale.<\/p>\n
This is particularly evident in a subset of consultancies. The big four \ufeffaccounting firms \u2013 Deloitte, EY, \ufeffPricewaterhouseCoopers and KPMG \u2013 posted 44\ufeff% fewer jobs \ufefffor graduates this year compared with 2023.<\/p>\n
\u201cHistorically, accountancy firms have typically had a pyramid structure \u2013 wide base, heavy graduate recruitment,\u201d said Ian Pay \ufeffof the Institute of Chartered Accountants in England and Wales, ICAEW, the industry body\ufeff. \u201cFirms are now starting to talk about a \u2018diamond model\u2019 with a wide middle\ufeff tier of management because, ultimately, AI is not sophisticated enough yet to make those judg\ufeffment calls.\u201d<\/p>\n
Cuts to graduate cohorts since 2023 have ranged from 6\ufeff% at PwC to 29\ufeff% at KPMG. According to James O\u2019Dowd, founder of talent adviser\ufeff Patrick Morgan, these are accompanied by senior employees being paid more and more job offshoring. Up to a third of some firms\u2019 administrative tasks are carried out in countries with lower labour costs such as India and the Philippines.<\/p>\n
\u201cThere\u2019s no secret that bigger firms have been doing offshoring for quite a long time,\u201d Pay said. \u201cFirms slightly lower down the chain have been starting to explore it too.\u201d<\/p>\n
According to Patrick Morgan research, last year Deloitte cut year-on-year headcount in the Netherlands by 5\ufeff%\ufeff and increased its workforce in Malaysia by 9\ufeff%; KPMG cut its headcount in the UK by 7\ufeff% and\u00a0raised it by 10\ufeff% in Pakistan; EY\u00a0cut its Germany office by 6\ufeff% and grew in Indonesia by 7\ufeff%; and PwC, \ufeffafter an accounting scandal in Australia, cut its workforce there by 18\ufeff%, while increasing roles in Mexico by 12\ufeff%.<\/p>\n
Competition is also heating up in the sector, partly driven by private equity\u2019s (PE) growing interest in buying and scaling smaller firms. PE-backed deals for accountanc y companies firms ies in Europe rose from 10 to 20 deals in the years before 2022 to more than 100 in 2023 and nearly 200 in 2024.<\/p>\n
\u201cI think you\u2019re going to see genuine competitors to the big four over the next one or two years,\u201d O\u2019Dowd said. \u201cPrivate equity and AI influence is highlighting that the operating models of a lot of these older firms are quite inefficient \u2026 The question they should ask is: \ufeffhow do we change our talent, mix our people, our systems, our operating model to make it through the valley of death?\ufeff\u201d<\/p>\n
Similar problems are faced by the likes of McKinsey, \ufeffBoston Consulting Group and Bain. The industry that made disruption a cult is now getting a taste of its own medicine. For the graduates who do make it through, their jobs could look very different indeed.<\/p>\n
Photograph by Daniel Leal\/Getty<\/p>\n","protected":false},"excerpt":{"rendered":"Consultants are facing the awkward task of researching AI-driven job cuts within their own industry. \ufeffLast week, a…\n","protected":false},"author":2,"featured_media":17600,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":["post-17599","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/17599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=17599"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/17599\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/17600"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=17599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=17599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=17599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}