Another reason companies hire consultants is to cover their *&^. As the old saying goes, “Nobody ever got fired for hiring McKinsey”; even if the project goes poorly, the CEO can blame the consultant instead of management.
But it’s becoming much more difficult for consulting firms to stick with their old tactics, and their old business model. The industry is being disrupted by two powerful forces. The first is the Trump administration’s crackdown on consulting for the federal government. According to the General Services Administration, the top 10 contractors alone were set to be paid $65 billion by the government in 2025—and the administration is adamant that that number be substantially reduced. It is voiding contracts that it does not believe are “mission critical.” And it is insisting that government consultants find significant savings—or else.
In a pointed letter to procurement officials throughout the government, acting GSA head Stephen Ehikian, complaining about the amount the government was spending on consultants, wrote: “This needs to, and must, change.”
The second factor is the arrival of artificial intelligence as a dominant force in American business. Although the big consulting firms are hoping to make money providing AI services to clients, the clients have figured out that AI can often provide an analysis in 10 minutes that used to take a team of junior consultants weeks or months to do. “It used to take two weeks to do a SWOT analysis with all the people engaged in doing research,” said Soren Kaplan, an innovation expert who has predicted for years that AI would upend the consulting business. (“SWOT” stands for strengths, weaknesses, opportunities, and threats.) “Now it takes two minutes with AI. It is going to change the economics in a huge way, making everything cheaper and faster. And this is going to come into play in consulting in a huge way.” Ten minutes of work versus two weeks means a lot less money for the consultants.
The Consulting Crash Is Coming, argues Joe Nocera (@opinion_joe) in @TheFP
— Stephen Landry (@landryst) July 11, 2025
"Bloated, overpaid, and outpaced by AI—big firms confront a future they can’t outsource."https://t.co/NTrGqpgGBI pic.twitter.com/j4KNBWR3TK