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Key Takeaways
- The traditional consulting industry is facing potential obsolescence as the AI revolution starts to kick in.
- Consulting is now likely to split into two camps: AI-driven analysts and human-centered enablers.
- AI can point to the “what” and “how,” but it can’t discern. Only humans can unravel the “why.”
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There’s an old adage that goes, “No one ever got fired for hiring [insert consulting firm here].” This rang true for many years, as there was no substitute for consulting ‘SaaS’ (‘scapegoat as a service’) — but a reckoning is coming.
After nearly a decade of uninterrupted growth, the days of multi-million-dollar, multi-year contracts with governmental entities and private companies are swiftly withering away. Firms that succeeded in convincing organizations they couldn’t solve their own problems are finding their claims, value, and costs are being called into question.
In just the last few months, Pricewaterhouse Coopers let go 1,500 US workers (2% of its US workforce), following 1,800 cuts in 2024. Accenture announced a round of 19,000 layoffs in 2023, with ongoing reductions continuing. KPMG laid off 4% of its US audit workforce, citing pressure on profit margins. Deloitte, Booz Allen Hamilton, IBM, and Guidehouse were pressured to justify their fees by the Department of Government Efficiency. Microsoft has even completely halted hiring in its consulting business.
And it’s all because there’s a new sheriff in town — AI.
I’ve said before that consulting is bullshit. The industry has always been a strange hybrid of insight and illusion. At its best, it’s about uncovering what organizations can’t see in themselves to identify the hidden drivers of growth. At its worst, it’s been about glossy decks, generic frameworks, surface-level diagnoses dressed up as strategy, and most commonly, cutting heads.
Now, with AI, CEOs are starting to do the math. AI can process mountains of information faster than any human ever could. It can benchmark, categorize, summarize, and even recommend. So theoretically, if an initiative used to cost $500,000 to implement with in-house resources, and machine learning can drop that cost down to $10,000, where does a $100,000 consulting fee fit in the equation? It doesn’t.
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Additionally, organizations can augment their existing workforce through AI, raising their employees value through increased output and efficiency. It then becomes a dual advantage — companies can get more work, faster work, out of fewer employees, without the exorbitant consulting fees. And, boy, do CEOs like to save money.
And, because the bulk of billable consulting hours comes from the reams of research, analysis, and reporting they produce, the potential for the obsolescence of traditional consulting is very real. The classic ‘pyramid’ staffing model which relies on a large base of junior staff to support a few senior partners will cease to exist. Traditional labor-intensive business models will be stressed to the brink by more nimble technologies.
Of course, there’s always a point where we’ll need an expert. Outside of the corporate world, it’s maybe a plumber to handle a sticky situation with a backed-up sewer line. Or an electrician to wire up a few new outlets and a security light. We hire experts because they provide a skillset and experience that we don’t have or don’t see value in learning. In the business realm, the ‘expert’ will be the one who provides insights, expertise, and unique value that is economically unreasonable to source any other way. This means that, in short order, the industry will be split into two camps:
- AI-Driven Analysts — Firms that specialize in automation, process modeling, and data-heavy recommendations for highly complex environments.
- Human-Centered Enablers — Consultants who understand organizations as living systems and help people adopt and sustain change.
The first group will desperately fight for relevance against AI tools that are faster, cheaper, and tireless. The second will redefine what consulting means. The death knell will quickly sound for those who refuse to take either position because, ‘this is the way we’ve always done it.’
Viva la (value) revolution
AI is brilliant at collecting what’s obvious, but most organizational problems aren’t obvious. They’re layered, contextual, and full of contradictions.
Yes, AI can tell you that sales are down 15%. It can show which regions underperformed. But it can’t tell you that customers stopped trusting your messaging because your sales team quietly changed its tone after leadership turnover. It can’t recognize that your marketing team’s ‘alignment meetings’ are just polite battles over conflicting goals. It doesn’t know what’s missing from the data or which questions matter most.
That kind of understanding doesn’t come from quantitative data or AI. It comes from experience. The kind of ground-level, hands-on work that real experts have spent years, even decades, doing inside real organizations. A real expert can decipher an unclear value proposition, misaligned incentive structure, or a toxic internal culture masquerading as a revenue problem. A real expert can recognize the subtle threats and risks AI has no transparency to — the language people use in meetings, the gaps between stated goals and actual incentives, or the moment when employees stop speaking up.
Traditional consultants have dropped the ball for years. They perceived their value in the data, rather than in insights, observations, and human understanding.
This is where traditional consultants have dropped the ball for years. They perceived their value in the data, rather than in insights, observations, and human understanding. They got lost in the jargon and gobbledygook of notoriously vague ‘consultancy speak.’ And with the AI revolution underway, it will be easy for these firms to continue to mistake information for understanding when they have a clean and comprehensible output from an LLM.
But without context, it’s like a map without a legend — it shows you where things are, not what they mean. AI can point to the “what” and “how,” but it can’t discern. Only humans can unravel the “why.” That’s what makes the next era of consulting profoundly human — the ability to see beyond what’s presented, interpret nuance, and make sense of the contradictions that define real organizations.
AI will quickly and ruthlessly trim the fat, strip away all illusion, and force the industry to return to its true purpose: helping organizations think better and change for the better. The firms that survive this transformation will be those which seamlessly blend technological fluency, human understanding, and deep contextual insight. Because consulting should never have been just about reports, slide decks, and billable hours. It should always have been about knowing what to look for, what to question, what to ignore, and helping leaders be better decision makers.
But what do I know? I’m just a consultant.
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