Top executive at McKinsey shared some hard numbers on how AI is reshaping the consulting giant’s workforce.
Bob Sternfelsthe global managing partner of McKinsey, appeared at the Consumer Electronics Show in Las Vegas on Tuesday for a live taping of the “All-In” podcast with co-host Jason Calacanis and Hemant Taneja, CEO of General Catalyst.
Sternfels said AI has fundamentally changed the way McKinsey runs its business, allowing it to create and eliminate jobs in equal measure while still achieving overall growth.
Calling this approach the “25 squares,” Sternfels said McKinsey is increasing its client-facing roles by 25% — what you typically imagine when you think of a McKinsey consultant. At the same time, it said non-customer-facing positions, which make up the other half of its workforce, have declined by about 25%, while production on that side has increased by 10%.
“Our model has always been about growth just tied to growth in total headcount. Now it’s actually a division. We can grow in this part, the customer-facing part, and we can shrink in that part and have overall growth in total,” he said. “It’s a new paradigm and a new dynamic.”
Sternfels said the company has seen huge productivity gains through AI adoption, saving 1.5 million hours of research and synthesis work last year alone. Instead of doing work typically done by younger employees, he said McKinsey consultants are “moving up the ranks” and tackling more complex problems.
McKinsey employees also have a whole new group of colleagues who are increasingly becoming an essential part of the company: AI agents, who can act independently like digital employees. Sternfels said that as of last week, the company had 40,000 human employees and 25,000 custom agents. Sternfels said AI agents are capable of handling entire functions on their own.
He expects McKinsey to have roughly the same number of AI agents as human employees by the end of the year.
For young professionals entering the workforce, Sternfels said they should think about honing the skills that AI can’t do, defining the right aspirations, human judgment and true creativity.
Business Insider has previously reported on how AI is disrupting consulting and changing the way companies like McKinsey make money, including shifting to a outcome-based pricing model.
The personnel changes at McKinsey also reflect a broader challenge facing large, established companies as AI upends the way we work.
“It’s about how do you transform existing entities into something different,” he said at CES, adding that for existing large companies “you have a choice: transform or die.”
He added that businesses are now “literally moving at breakneck speed.”
“I have yet to meet a CEO who doesn’t talk about ‘how to move my organization forward faster,’” he said. “Frankly, it’s less a question of strategy than of speed of organization.”