A Shrinking Role for Consultants

Consulting firms like McKinsey, Bain, BCG, and Deloitte rode a post-pandemic boom. Now they are looking at a reckoning. AI has changed the game. It streamlines tasks clients once hired consultants for. Deploying AI tools is now easier and cheaper than engaging outside experts. Instead of billing by the hour, firms are shifting toward project-based fees, because hourly billing no longer makes sense when AI slashes work hours.

Trump’s Cost-Cutting Coup

The Trump administration is adding pressure. Luxurious government consulting contracts are getting slashed. Firms like Deloitte and Booz Allen have already felt the heat with layoffs. Accenture reports that delays and cancellations of federal contracts are hitting revenue hard.

The “Consulting Crash” Warning

Joe Nocera, veteran business columnist, warns of a looming “consulting crash.” Billionaire Peter Thiel is even more blunt: “If the consulting business was a stock, I’d be shorting it right now.”

A Ray of Hope for the Few

Not everyone is writing the industry off. McKinsey says it’s using AI internally to save thousands of hours. That frees up time for innovation, client engagement, and deeper strategic work. Their take is that organizations still need high-touch help navigating AI transformation. It’s a survival strategy for top firms.

What It All Means

AI is more than a tool, it’s changing the consulting business model. Hourly billing is getting outdated. Clients can implement tech without consultants. Even big contracts aren’t safe when political shifts target government spending. The industry could polarize. Top-tier firms may endure by transforming how they work. Mid-tier and lower-tier players could struggle to survive.