McKinsey Turns the Mirror on Itself

What happens when the world’s most famous consulting firm turns its own advice inward? For nearly a century, McKinsey & Company has been the go-to fixer for Fortune 500 giants in need of a turnaround. But in the past 18 months, the firm has pulled the classic consulting playbook on itself, quietly letting go of more than 10% of its global workforce, managing legal and reputational storms, and doubling down on artificial intelligence to future-proof its business. In an industry that once seemed bulletproof, even the blue-blooded McKinsey is learning that no one is immune to disruption.  

From Pandemic Boom to Post-Boom Blues 

Just a few years ago, consulting was the hottest ticket in town. As the pandemic upended business as usual, companies scrambled for advice on everything from remote work to digital transformation. McKinsey, along with rivals like BCG and the Big Four, went on a hiring spree for the ages. Between 2020 and 2023, McKinsey’s headcount ballooned from 34,000 to over 45,000, a nearly two-thirds increase. 

But as the world returned to something resembling normal, the consulting gold rush lost its shine. Demand cooled, clients tightened budgets, and the “Great Resignation” flipped to the “Great Stay”; suddenly, voluntary turnover dried up. The result? Firms like McKinsey found themselves overstaffed and facing a sharp slowdown in revenue growth. 

Strategic Attrition or Silent Layoffs? 

By May 2025, McKinsey’s headcount had fallen to 40,000—over 10% below its 2023 peak. The firm avoids the term “layoffs,” attributing the decline to “normal attrition,” stricter performance reviews, and voluntary exits. Yet the numbers tell a different story: 1,400 back-office roles and 400 tech specialists were let go, thousands flagged in tougher mid-year reviews, and many mid-level staffers nudged out with generous severance. All this comes as McKinsey faces fallout from a $1.6 billion opioid settlement that’s hurting its public-sector pipeline. Across the industry, the pain is shared—Deloitte, PwC, and Booz Allen have all made sizable cuts—revealing just how brittle the consulting boom has become. 

Lilli and the New Consulting Model 

McKinsey isn’t just slashing costs—it’s reinventing consulting through tech. Meet Lilli, the firm’s proprietary AI platform, trained on a century of internal knowledge and launched in 2023. Now answering over 500,000 prompts monthly, Lilli is used by 72% of staff and has become a core part of daily workflows. The impact: content quality up 20%, research time down 30%, and projects that once took weeks now finished in hours. Far from being a simple chatbot, Lilli helps craft project plans, coach discussions, and catch issues before they reach clients. While others like BCG and Deloitte are building their own AI tools, McKinsey’s head start is reshaping the industry standard. Check out our article: How McKinsey Quietly Built the Most Powerful AI in Consulting 

How AI Is Changing the Game 

AI is revolutionizing consulting and professional services by delivering speed, precision, and scale. Tools like McKinsey’s Lilli can slash market research time by up to 80%, transforming weeks of work into mere hours. With access to vast internal knowledge, these platforms generate sharper, more insightful analysis. AI also enables firms to scale efficiently—serving more clients without growing headcount—and helps manage risk by flagging compliance issues early. The message for professionals is clear: whether you're in tax, audit, law, or finance, embracing AI isn’t optional anymore. Those who integrate it into their workflow will stay ahead of the curve, while others risk falling behind in a rapidly evolving landscape. 

The Future of Consulting 

McKinsey is still hiring and expanding, but the era of unchecked growth is over. Today’s consulting model is leaner, tech-driven, and built for high-impact work. Across the industry, firms like BCG and the Big Four are feeling the pressure to innovate, automate, and rethink how they manage talent. AI isn’t a threat—it’s a competitive edge for those ready to evolve. 

So, how can professionals apply the McKinsey playbook without the chaos? Start by using AI for research, drafting, or compliance tasks. Adopt data-driven performance reviews without sacrificing team culture. Stay flexible to shifting demand. Most importantly, invest in upskilling—because the future belongs to those who can work with AI, not against it. 

The Bottom Line 

McKinsey’s great reset is a wake-up call for the entire professional world. It won’t be a surprise if, in the coming months, Boston Consulting Group and Accenture follow the same strategy. Even the “smartest people in the room” have to adapt when the rules change. Whether you call it layoffs, attrition, or a strategic pivot, the message is the same: technology, market forces, and legal realities are rewriting the script for consulting and beyond.