August 5, 2025
5 min read
Eric Hastings
McKinsey deploys 12,000 AI agents, cutting 5,000 jobs and driving 40% revenue growth, while Elon Musk doubts AI will soon replace consultants.
McKinsey’s AI Agents Slash 5,000 Jobs, Boost Revenue 40% – Musk Skeptical
McKinsey & Co. has deployed 12,000 AI agents to streamline its operations, marking what the firm calls an “existential” shift in the consulting industry. These AI tools handle tasks ranging from data analysis to drafting reports, fundamentally changing how consultants deliver value to clients. According to a recent TechRepublic report, McKinsey aims for a one-to-one ratio of human consultants to AI agents, reducing reliance on junior staff for routine work. Kate Smaje, McKinsey’s senior partner overseeing AI initiatives, told The Wall Street Journal that while this transformation raises existential questions for the profession, it ultimately represents an “existential good.” The firm has already seen tangible impacts: project team sizes have shrunk from 14 analysts to just two or three humans augmented by AI swarms, resulting in headcount reductions of about 5,000 roles. This efficiency drive has propelled AI to account for 40% of McKinsey’s revenue, signaling a shift toward outcome-driven consulting over traditional slide-heavy presentations. Elon Musk, CEO of Tesla and xAI, has expressed skepticism that AI will soon render consultants obsolete. Responding to the Wall Street Journal report on X (formerly Twitter), Musk noted that CEOs often hire consultants primarily to validate decisions they have already made and to provide a scapegoat if things go wrong. As detailed in Mint, Musk’s perspective highlights a human element in consulting that AI may struggle to replicate — the nuanced role of external validation and blame diffusion in corporate decision-making. This commentary comes amid broader industry turbulence, as AI threatens entry-level jobs in analysis and research. McKinsey’s adaptations, including tying partner compensation to AI adoption, illustrate how top firms are reshaping client interactions, hiring practices, and project scopes. Yet Musk’s point resonates: while AI excels at speed and scale, the strategic advisory function often hinges on interpersonal dynamics and accountability structures that technology alone cannot fully address. The consulting sector, long dominated by firms like McKinsey, Accenture, and Deloitte, now faces pressure to evolve or risk irrelevance. Reports from the Hindustan Times suggest Musk’s influence could extend to government reforms, potentially applying tech efficiency principles to federal operations and challenging traditional consulting models. Meanwhile, AI’s integration is prompting ethical debates, as seen in a New Yorker analysis questioning whether the technology will concentrate wealth and disempower workers. For industry insiders, McKinsey’s strategy offers a blueprint: embracing AI not as a replacement but as a force multiplier. Social media posts reflect growing sentiment that junior roles are evaporating, with AI handling 90% of benchmarking and trend analysis. Yet, as Musk implies, the human touch in confirming executive biases may preserve consulting’s core for years to come. Looking ahead, McKinsey aims to balance its human-AI mix, focusing on high-value outcomes like strategic risk identification. This shift could redefine success metrics, moving from billable hours to measurable impacts. Industry observers note that while AI automates drudgery — echoing Musk’s recent comments in Mint about coding jobs — the consulting profession’s resilience lies in its advisory essence. Ultimately, this transformation invites a reevaluation of value in professional services. As firms adapt, the interplay between AI efficiency and human judgment will determine who thrives in this new era, with McKinsey leading the charge and skeptics like Musk reminding us of enduring human frailties.Source: Originally published at WebProNews on August 4, 2025.