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Lay-offs are replacing PowerPoint presentations as the heraldic emblem of the management consultant. McKinsey & Co is the latest to swing the axe, pruning its workforce by a reported few thousand over the next two years. The blue-blooded management consultancy was preceded in its payroll trimming by Accenture in the US and some of the UK’s Big 4.
Sure, the spectacle of management consultants swallowing the advice they routinely mete out to clients will afford observers more than a little schadenfreude. It shows the sector is not immune to disruptive forces. Human jobs are falling to artificial intelligence. Staff churn is sclerotic, and when employees don’t walk voluntarily, some must be pushed.
But consultancies are also taking another leaf from their own playbooks: they are hot on the acquisition trail. Several are striking deals, either directly or via venture capital arms, to buy entry into specialised industries such as life sciences, adding people they think they need even as they exit “on a compressed timeline” people they don’t.
Accenture earlier this month bought Ryght AI, which uses agentic AI to accelerate the time-consuming business of trial feasibility and patient recruitment. Earlier purchases home in on cell division and early cancer detection.
A second bucket of deals involves ready-made tools of the trade, to measure the effectiveness of marketing, say, or digital design or enterprise software specialists. IBM, Accenture, India’s Wipro and KPMG have all bought specialist SAP firms.
At heart these deals, mostly for small and undisclosed sums of money, buy talent and intellectual property that would be costly and take time to develop in-house. That makes them somewhat akin to Big Tech’s acqui-hires, illustrated on a grand scale by Meta Platforms’ purchase of Scale AI. Exhaustive as they are, hiring rounds at McKinsey are more likely to yield bright generalists than top-of-the-pack tech wunderkinds or biotech boffins.
Those who don’t take to the consultant life may still find a home in the firms’ venture capital arms. Clients, meanwhile, get access to industry specific issues: the AI-driven tools to accelerate clinic trials, for instance, or to measure the return on ad dollars in a few swipes.
Naturally, this jargon-packed industry is not averse to what big companies often refer to as “transformational deals” — often denoting a big swerve into a new business line. France’s Capgemini in October paid £3.3bn for US-listed WNS, a business process services group. It plans to create next-level outsourcing: replacing labour-intensive IT help desks and call centres in India, say, with agentic AI to take on back-office and other processes.
There is an irony here: consultancies have enthusiastically contributed to the body of research showing most deals leave investors worse off. When the main asset is people, that’s an even bigger risk — just look at the chequered history of investment banking mergers. But the premise of selling advice is that those with smart ideas can buck the value-destructive trend. What better way to put that to the test?
louise.lucas@ft.com
