The global consulting industry is undergoing a significant reset, and even McKinsey & Company, long considered one of its most powerful players, is not
immune to the change. As clients tighten budgets and governments rethink spending priorities, the firm is being forced to adapt to shifting demand, political pressures, and reputational challenges, all while projecting confidence about its future. Across industries, corporations and governments are becoming far more selective about how much they spend on advisory services. That change has slowed demand for traditional consulting work, pushing firms like McKinsey, EY, and PwC to reduce headcount over the past few years. McKinsey’s most recent move came just last month, when it eliminated roughly 200 technology roles worldwide, according to a recent report from Bloomberg. The cuts reflect a broader trend: consulting firms are increasingly turning to artificial intelligence to streamline operations and automate tasks that once required large teams. Also Read: Amazon Layoffs Aren’t Over: 14,000 Jobs Already Cut in October, More Coming Political And Regional Headwinds Mount External pressures are adding to the strain. In the United States, Accenture Plc has warned that President Donald Trump’s efforts to curb government consulting expenditures could weigh on growth prospects for the entire sector, states the report. Elsewhere, challenges are emerging from key international markets. China, for example, has encouraged state-linked organisations to rely more heavily on domestic consultancies, limiting opportunities for global firms. Saudi Arabia has also become a tougher environment. The kingdom has been scaling back payments to consulting companies involved in major national projects. Over the decade leading up to 2024, McKinsey earned no less than $500 million per year in fees from Saudi Arabia, according to the report, citing a person familiar with the matter, making it one of the firm’s most important clients. Rebuilding After Controversy And Setbacks Beyond economic and political pressures, McKinsey continues to grapple with reputational fallout. In the US, the firm has faced criticism over its work in China and Saudi Arabia, as well as lingering consequences from past engagements with opioid manufacturers, the Bloomberg report claims. Those relationships resulted in hundreds of millions of dollars paid in civil penalties and settlements tied to allegations that McKinsey contributed to the opioid crisis. Despite these challenges, global managing partner Bob Sternfels has struck an upbeat note internally, signalling that the firm believes it has turned a corner. Addressing partners in Chicago, he said, “I feel we’ve collectively righted our ship.” The message underscores McKinsey’s determination to move beyond controversy and reposition itself for a more disciplined, technology-driven consulting landscape, according to the Bloomberg report.
