Paytm Founder Vijay Shekhar Says ChatGPT Is The ‘New Consultant In Town’ As Mckinsey Lays Off 5,000

McKinsey's Workforce Reduction

• ⚠️ McKinsey & Company has laid off over 10% of its global workforce, totaling more than 5,000 jobs in the past 18 months.
• 📉 This marks one of the biggest downsizing efforts in the firm's nearly 100-year history, reducing its headcount from over 45,000 to around 40,000.

Factors Behind Layoffs

• 📈 During the COVID-19 pandemic, McKinsey aggressively expanded, adding tens of thousands to its headcount and diving into digital services.
• 📊 Post-pandemic, demand slowed, revenue growth tapered, and the AI boom emerged, leading to overstaffing.
• ⚖️ The firm also faced legal troubles, paying $1.6 billion in settlements related to its controversial work with US opioid manufacturers.
• 🛠️ McKinsey initiated a major restructuring in 2023, cutting 1,400 back office roles and 400 data/software engineering specialists, alongside a more stringent performance review process.

The Rise of AI in Consulting

• 💬 Paytm founder Vijay Shekhar Sharma stated that ChatGPT is the "new consultant in town," suggesting AI as a key factor behind the layoffs.
• 💡 AI models like ChatGPT, Google Gemini, and Microsoft Copilot are rapidly disrupting traditional industries, including consulting, HR, and finance.
• ⏱️ A Newsweek report indicated that AI saved consultants up to 6 hours each week, highlighting its efficiency benefits.

Broader Industry Impact

• 🤖 IBM recently reported 8,000 layoffs, with approximately 200 HR roles replaced by AI agents capable of handling repetitive administrative tasks.
• 🚀 While some firms like Boston Consulting Group (BCG) reported a 10% rise in revenue and workforce growth, the conversation is shifting towards AI's increasing capability to offer expertise comparable to consulting firms.