The Consulting Crisis in 2026: Is AI Replacing Junior Consultants?

Two years ago, we put out a video called "The Consulting Crisis at McKinsey, BCG & Bain." It's still the most-watched thing we've ever made. Over 260,000 views on YouTube. And the number-one question in the comments has never changed: "Is it over yet?"

Here's a link to the 2024 video if you are interested:

https://youtu.be/zJCDZLO9fBM

In short, no. But it's also not what it was in 2024. Consulting in 2026 is a different beast, and there's a new question on the table now: is AI replacing junior consultants?

We spent 6+ years each at McKinsey, we've been case interviewers ourselves, and we've stayed plugged into what's happening at the firms through our network. We now hire consultants from the client side too, so we see the proposals and the daily rates land on our desk. That's the vantage point we're writing this from. Not LinkedIn takes. What's actually happening.

A Quick Recap: How We Got Here

If you read our original Consulting Crisis post, skip ahead. For everyone else, here's the 90-second version.

Consulting has always been cyclical. Strong economy, big consulting budgets. Weak economy, less work. That part is normal. What wasn't normal was how the last cycle started.

Covid hit in 2020. Companies froze projects. Then, six months later, business at the firms exploded instead of collapsing. Hybrid work, e-commerce shifts, broken supply chains. Suddenly every client needed help adjusting to the new normal, so the firms hired aggressively.

Here's the part most people miss. A consulting offer goes out about 6 months before someone starts. So McKinsey, BCG and Bain were hiring in 2022 based on the demand they expected to see in 2023. Optimistically. They'd rather carry someone they have no project for (call it $3,000 to $4,000 a week of cost) than miss a project because they're short on people (six-figure opportunity cost per week). So they over-hired on purpose.

Then, in late 2022, demand dried up. Inflation, the war in Europe, the energy crisis. Business confidence hit its lowest point in 20 years. An armada of new joiners landed in 2023 into a market with no projects for them.

You know the rest. Juniors on the beach. Senior consultants undercut on price. Promotions delayed. Reviews getting harsher. Exit opportunities shrinking. We covered all of it in the original post.

That's where the story ended in early 2024. It's 2026 now, and the picture has moved.

Where We Are in 2026

Let's start with what the numbers say.

1. McKinsey shrank, and not by a little.

McKinsey announced cuts of roughly 5,000 jobs in 2025, about 10% of its global workforce. Add the 2,000 from "Project Magnolia" in 2023 and another round in 2024, and the firm is meaningfully smaller than it was at the peak. This is the largest, most prestigious firm in the world actively getting leaner.

2. BCG quietly overtook McKinsey in headcount.

That used to be unthinkable. For decades McKinsey was the biggest of the three. But BCG grew revenue by 10% in 2024 while McKinsey was cutting, and it went more aggressively into the mass market, accepting lower daily rates to win volume. The student surpassed the master, at least on size.

3. Partner elections at McKinsey were cut almost in half.

In 2022, McKinsey elected 400 new partners. In 2025, that number was 224. So this isn't only a junior problem. The pyramid is tightening at every level. We already knew that from former colleagues, but now it shows up in the numbers too.

4. Daily rates are coming down.

The average daily rate for a McKinsey project team member used to sit north of $7,000. A team of three could cost a client $100,000 a week. Clients started saying no, and other firms started undercutting at less than half that, sometimes under $3,000 a day. McKinsey blinked. They're now bidding for work at prices they'd have laughed at three years ago. We see it ourselves from the client side. The daily rates on the proposals we review are a race to the bottom.

5. On the project teams, you're seeing the "JEM" phenomenon.

JEM stands for Junior Engagement Manager. Instead of staffing an expensive Engagement Manager to run a project, the firm staffs a strong Senior Associate and lets them do the EM job at the Senior Associate price. The result? Engagement Managers, once the most in-demand people in the firm, are now sitting on the beach. And the Senior Associates who can't JEM are struggling too, because their slots get filled by cheaper Associates or Business Analysts. The squeeze isn't just at the bottom anymore. It's compressing the whole pyramid.

Now the good news, if you want to call it that. The bottom is most likely behind us. A dynamic economy is usually good for consulting, because companies hire consultants precisely when the world is moving fast and they don't know what to do. AI investments, geopolitical shocks, energy markets, the dollar. There's plenty for clients to be confused about. So the projects are coming back. They're just smaller, cheaper, and staffed leaner.

That's the macro picture. But it's not the headline question if you're in your final year at university. The headline question is the one in the title.

Is AI Replacing Junior Consultants?

Let's actually go through it, because this is the thing we get asked about every single week.

First, why people are right to be worried. List out what a junior consultant actually does on a project: researching markets, building Excel models, writing summary slides, formatting decks, pulling together executive summaries. Those are exactly the tasks AI is best at right now.

And the firms are not subtle about it. McKinsey's internal AI, Lilli, is now used by roughly 72% of all McKinsey consultants, about 7,000 people. They claim it saves 30% of research time. Their global managing partner, Bob Sternfels, publicly said McKinsey has 60,000 "employees," 25,000 of which are AI agents. Read that again. Almost half the stated workforce of the most prestigious consulting firm in the world is software.

So yes. If your entire value as a junior is being the person who does fast, clean research for the team, that value is dropping.

But there's a second story here, and it's the one most LinkedIn influencers won't tell you.

1. Clients aren't replacing consultants with AI. They're replacing bad consulting with AI.

Companies are not handing make-or-break strategy calls to ChatGPT or Claude. Nobody is entrusting a $50 million transformation to a model that might be hallucinating. If McKinsey or BCG sign off on a move that goes south, the CEO can point at the consultants. If ChatGPT signed off and it goes south, that CEO is the one without a job. Top strategy work is high-context, high-trust, high-stakes. AI doesn't replace any of those three.

2. The Deloitte scandals are the warning shot.

In October 2025, Deloitte handed a $290,000 report to the Australian government. Then a researcher noticed the footnotes pointed to academic papers that had never been written. Deloitte had let AI write parts of it, and they refunded the money. A few weeks later, the same thing happened in Canada, on a report worth about a million dollars. Now picture Deloitte trying to sell AI strategy advice to the next client after that. How do you still trust them on it? So the firms have a real incentive not to over-replace humans with AI, especially the top ones whose whole business is built on the words "trusted advisor."

3. AI is also driving consulting demand.

Christoph Schweizer, the CEO of BCG, said in late 2024 that 20% of BCG's revenue was already AI-related. McKinsey's digital practice is growing fast. Every Fortune 500 company is asking the same question: how do I deal with AI before AI deals with me? And who do you call? Your trusted advisor. So AI is both a threat to consulting tasks and a boost to consulting demand. Net-net, the firms are not in existential danger.

Now the part you actually need to hear, because you're going to get "consulting is fine, don't worry" from a lot of recruiters who want to keep the funnel full. We're not in that game.

AI is not replacing junior consultants. But it is compressing the number of junior slots.

Put the pieces together. Daily rates are down, so there's less margin per project. The JEM phenomenon pushes the cheapest capable body into every slot. Lilli synthesizes in seconds what used to take a junior a full evening. Shared service centers in India and Costa Rica already absorbed much of the slide work. And McKinsey just cut 5,000 jobs. You don't need to be a strategy consultant to do that math. The headcount you're trying to break into is smaller, and it will probably stay smaller for a few years.

What This Actually Means for You

So you're a final-year student, an MBA, or a young analyst trying to make the jump to MBB in 2026. What do you do with all of this?

1. The bar is higher than it was in 2022. Get used to it.

In the hiring-spree years, the firms never admitted they were lowering standards, but somehow they always hit their recruiting numbers. That game is over. They're hiring tightly now, only the people they're genuinely excited about. Your CV, your case prep, your PEI stories have to be great, not just passable. The offers aren't going out like confetti anymore.

2. Be the rock star, or be the specialist. Don't be the person stuck in the middle.

This was true before. It's more true now. The juniors who get fully staffed in 2026 fall into two buckets: the genuine rock stars who sit at the top of every project and every appraisal, and the ones with a niche skill the firm needs (e.g., AI, supply chain, climate, healthcare, regulatory). The middle of the pack is exactly where the AI and the JEM phenomenon are eating headcount.

3. Become AI-native. Yesterday.

If you walk into a McKinsey interview in 2026 and admit you've never seriously used Claude or ChatGPT, you're signalling something bad. The firms aren't looking for people who are scared of AI. They want people who already use it as a force multiplier. Build the muscle memory now. Use it for your coursework, use it at your job, get fluent before the interview, not after.

4. Don't romanticize the firms.

The McKinsey of 2026 is not the McKinsey of 2018. The brand is real and the prestige is real, but the experience is harsher: leaner teams, less mentorship, more pressure, faster up-or-out. If you're joining for the title and the LinkedIn flex, you're going to have a bad time. If you're joining because you want to learn faster than anywhere else and you're ready to grind for it, the offer is still worth taking.

The Bottom Line

So is consulting in crisis in 2026? In short, no. But it's genuinely different from a couple of years ago. The story isn't "consulting is dying." It's that consulting is being reshaped. The firms are smaller, the pyramid is being squeezed, and the juniors who do get in will work alongside AI from day one.

Here's the part that should give you some optimism. The people hired through the back end of this downturn will probably end up being one of the strongest cohorts the firms have produced in years. Fewer average performers, more rock stars, more AI fluency, less coasting. It's a worse market to get into. But it's a better market to be good in. Your job is to be one of the good ones.

If you're prepping for MBB right now and you want the case interview side handled properly, our Case Interview Mastery course on Udemy walks you through 7 full McKinsey-style cases with detailed sample solutions and interviewer feedback, taught by us, two former McKinsey interviewers. If it's the CV that's holding you back first, the CV Masterclass covers that end.

Related posts you might find useful:

• The Ongoing Crisis at McKinsey, BCG & Bain

• GenAI in Consulting: McKinsey's "Lilli"

• Up-or-Out at McKinsey, BCG & Bain

• Is Joining MBB Still Worth It in 2026?

• The Perfect Consulting CV

Related video: Watch our YouTube video: Consulting Crisis at McKinsey, BCG & Bain in 2026:

https://youtu.be/-uXE-R-h2IE