McKinsey cuts about 200 tech jobs, shifts more roles to AI

[SINGAPORE] McKinsey & Co cut about 200 global tech jobs in the past week as the consulting firm joins rivals in using artificial intelligence to automate some positions.

The company is not ruling out additional reductions across different functions over the next two years as it ramps up usage of the technology, according to people familiar with the matter.

McKinsey is also closely assessing what tasks can be carried out by AI, the people said, declining to be identified as the details are private.

“AI is enabling unprecedented levels of opportunity and impact for us and our clients,” a spokesperson said in an emailed statement. “We are continually working to make our professional support functions more efficient and effective, including by taking advantage of AI.”

Global Managing Partner Bob Sternfels has said McKinsey is focused on investing in client-facing roles, while scrutinising headcount in other areas. The near century-old consultancy has about 40,000 staff, including roughly 3,000 partners.

“We are continuing to add folks who are client deployed,” Sternfels said in a Bloomberg television interview in September. “We will upskill folks more, we will probably have fewer folks in the non-client deployed areas, but they will be leveraged by today’s technology and AI.”

The industry is also being challenged by a number of headwinds, including tighter corporate budgets and changes to government policy. Rival Accenture said it expects US federal spending cuts on consultants to slow its growth next year, even after it beat expectations for revenue in the fourth quarter.

The firm is cutting staff who cannot be retrained as it pivots to more automated AI-related work, chief executive officer Julie Sweet told analysts on a September earnings call.

Advances in computing present staffing challenges across many industries as the technology makes many roles redundant.

SEE ALSO

HP to cut about 6,000 jobs by 2028, ramps up AI efforts

No bubble in AI, says JP Morgan Asset Management portfolio manager

Companies are warming up to saying AI is the reason for job cuts

Elon Musk spells danger for Accenture, McKinsey and their rivals

McKinsey warns banks of ‘fleeting’ profit rebound as declining rates set to bite

McKinsey weighs asking staff to come to office more often

McKinsey is becoming an MBA case study in crisis

More

Global banks alone will cut as many as 200,000 jobs in the next three to five years as AI encroaches on tasks carried out by humans, according to Bloomberg Intelligence.

JPMorgan Chase CEO Jamie Dimon has consistently advocated the opportunities, even if it eliminates some jobs.

The world’s biggest banks have been experimenting with AI over the last few years, spurred by its potential to boost productivity and lower costs.

Citigroup has previously estimated the technology could add US$170 billion to the banking industry’s coffers by 2028, with 54 per cent of roles having a high potential to be automated. BLOOMBERG