How McKinsey Lost Its Edge

The management consulting industry is facing potential disruption as AI companies enter the advisory business and traditional firms struggle to maintain growth. McKinsey, approaching its 100th anniversary, reduced its workforce by 5,000 employees since late 2023 while its revenue growth slowed to 2% in 2024.

Boston Consulting Group closed the gap significantly, growing 10% and reducing McKinsey's revenue advantage from more than double in 2012 to just one-fifth larger today. Technology companies including Palantir and OpenAI now offer consulting-like services to help businesses implement AI models, with Palantir's revenue growing 39% year-over-year. The shift threatens consulting's core business model, as clients may eventually question paying premium fees when AI can perform much of the analytical work traditionally done by human consultants.

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