AI allows "fewer junior employees to extract greater value"! Consulting giants like McKinsey have "frozen starting salaries for the third consecutive year."

The rise of artificial intelligence is profoundly reshaping the traditional business model of the consulting industry, forcing industry giants to reevaluate the talent pyramid structure that underpins their success.

The most direct signal is that top consulting firms, including McKinsey, have frozen starting salaries for graduates for the third consecutive year, as they find that AI technology allows them to extract greater value from fewer junior employees.

According to Management Consulted, an organization that provides interview coaching for students, and individuals familiar with related hiring offers, companies including McKinsey and Boston Consulting Group (BCG) have issued 2026 hiring contracts indicating that graduate compensation levels will remain the same as this year. This dynamic suggests that consulting firms, one of the largest recruiters of graduates and MBA students, are adopting a cautious hiring strategy.

"Implementing AI internally has brought tangible productivity improvements," said Namaan Mian, Chief Operating Officer of Management Consulted. He added that the ability to extract more value from fewer junior employees is "putting downward pressure on compensation structures." He believes that "the disruption brought by AI in professional services and technology is more real than in other areas of the economy."

The impact of this trend goes far beyond stagnant salaries. In anticipation of AI's potential to enhance efficiency, consulting firms are reducing hiring scales, adjusting talent structures, and sparking a debate over the survival of the industry's traditional 'pyramid' model. This not only affects the career prospects of tens of thousands of top graduates but also signals that the future landscape of the entire knowledge services industry may undergo fundamental changes.

Stagnant Salaries and Shrinking Recruitment

The trend of stagnant salary growth in the consulting industry has already emerged. Data from Management Consulted shows that in 2024 and 2025, McKinsey, BCG, and Bain & Company are offering a total first-year compensation package (including salary and bonuses) of between $135,000 and $140,000 for undergraduate graduates in the U.S., while MBA graduates will receive between $270,000 and $285,000. Salaries for 2026 will maintain this level. All three companies declined to comment on this.

Meanwhile, the starting salaries at the "Big Four" accounting firms—Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers—have stagnated for a longer period, showing no growth since 2022.

Behind the salary freeze is a contraction in recruitment scale. Marco Amitrano, head of PwC's UK division, stated that the company has already reduced its graduate recruitment for 2025. PwC also indicated in October that it would be unable to achieve its goal of increasing its global workforce by 100,000 by 2026—a target set five years ago, long before the widespread adoption of generative AI.

Two executives from the "Big Four" estimate that in the coming year, the number of graduate recruits at the largest consulting and accounting firms in the UK will decline by about half. One executive stated, "Part of the reason is commercial, as the market has become tougher, but part of it is also due to expectations regarding the impact of AI."

Strategic Transformation Under the Impact of AI

AI technology is fundamentally changing the way consultants work, driving the strategic transformation of companies. AI has reduced the demand for generalist analysts, whose traditional role was to process data and package market insights and strategic recommendations into PowerPoint presentations.

Mohamed Kande, Global Chairman of PwC, stated in an interview with the Financial Times last October that AI has increased employee productivity. In an interview with the BBC last month, he candidly mentioned that PwC is seeking to hire a group of “people with different backgrounds from traditional candidates,” including more engineers.

Mian from Management Consulted pointed out that this reflection is common among many consulting firms. As companies shift their focus from traditional strategic consulting to helping businesses implement technology and AI, they are seeking “more specialized employees with mid-career experience.” He explained, “It is much more difficult to involve a 23-year-old in such projects than to have an experienced person do it.”

In addition to adjusting client services, consulting firms are also actively promoting AI internally to increase partner profits and demonstrate its potential benefits to skeptical clients. Rob Hornby, Co-CEO of consulting firm AlixPartners, said, “Clients will naturally ask, what are you doing? Explaining how you apply AI in your own company has become a new credential.”

Accenture reduced its global workforce by more than 11,000 to 779,000 in the three months ending in August and stated that it would lay off those employees it believes cannot be retrained to use AI.

The Future of the Pyramid Model

The transformation triggered by AI is directly challenging the traditional “pyramid” structure of the consulting industry. In this model, companies hire thousands of junior employees and filter talent through a culture of “up or out,” with only a few reaching the top.

Industry experts have predicted various potential new models to replace the pyramid. Some are betting on a “obelisk” structure, which has fewer levels and relies less on junior employees; others predict the emergence of a “hourglass” structure—where the automation of routine tasks by AI leads to a contraction of the middle tier.

Antonio Alvarez III, European head of consulting firm Alvarez & Marsal, advocates for a “box model,” which brings the number of senior employees closer to that of junior employees, as it relies more on experienced professionals rather than a “large pool of junior analysts.”

However, Alvarez also added, “While we expect AI to enhance analytical capabilities and reduce the demand for junior labor, we also anticipate that AI will increase the overall demand for our services—creating a natural offset effect.”

Meanwhile, some former “Big Four” partners are founding AI-native boutique consulting firms. Mark Bunker, Managing Partner of startup Queen’s Tower Advisory and former senior partner at Deloitte, stated, “The direction seems to be that as routine work is automated, the bottom of the pyramid will shrink, but the demand for experienced judgment at the top will become even more critical

Industry Discrepancies and Uncertainty

However, not all executives believe that AI will completely overturn the pyramid structure. There are discrepancies within the industry, and the exact path forward remains unclear.

Eric Kutcher, Chairman of McKinsey North America, stated in September that the company will hire 12% more graduates in 2026 than this year. He believes, "The work we do will still require the same level of intellect and the same speed; what you will do are the things that machines cannot do."

Rob Hornby from AlixPartners holds a more cautious view. He believes that the traditional pyramid may "shrink somewhat," but "new job positions will emerge, including at the junior level, focusing on the management and planning of AI systems."

He concluded, "What the ultimate net effect will be, I am not sure. What the exact timing will be, I am also not sure. In both the Industrial Revolution and the Internet Revolution, there were losses first followed by gains, with a gap in between. This situation may also occur."