The consulting industry’s 70-year-old pyramid model is cracking in real time.

Four days ago, the Financial Times dropped a quiet bomb:

“Top consultancies freeze starting salaries as AI threatens the pyramid model.”

For the third year in a row, McKinsey, BCG, Bain and the Big Four have frozen graduate salaries.

Graduate hiring in the UK is down 50%.

Accenture just laid off 11,000 people and announced a massive partnership with OpenAI.

Microsoft paused all U.S. consulting hiring for an entire fiscal year.

In this episode, Malcolm breaks down why the pyramid is collapsing, what shapes will replace it, and why clients today show up better prepared with Gemini, Claude and ChatGPT than many consultants.

You’ll learn:

• Why junior consultant tasks (research, analysis, slide-making) have been automated
• Why partners are protecting profits at the expense of the base
• How Accenture admitted it can’t retrain its consultants fast enough
• Why clients now challenge Big Four experts using AI before meetings
• Why entry consulting roles may vanish before new ones are created
• What the “hourglass” and “obelisk” consulting models look like
• What this means for MBA graduates, senior partners, and boutique firms
• Why the real winners are small, AI-native consulting teams

If you're in consulting, planning to join, or hiring consultants for AI transformation — this episode is your wake-up call.

The pyramid is crumbling. Something new is rising.

KEY TOPICS COVERED

🔹 The Classic Pyramid Model (and why it worked for 70 years)

• Tens of thousands of junior analysts → few partners
• Juniors billed at 400–600 EUR/hour
• Model based on leverage + generalists + manual labor

🔹 Why the Pyramid Is Cracking Now

• AI replaces research, synthesis, due diligence, basic analysis
• Claude/Sonnet/Gemini produce P&Ls, analysis, dashboards instantly
• Slide-making still manual, but everything else is automated
• Clients know this — and refuse to pay old prices

🔹 Industry Signals & Data Points

• McKinsey, BCG, Bain freeze salaries for 3rd consecutive year
• PwC cuts graduate hiring by 50%
• Accenture cuts 11,000 consultants, signs OpenAI mega-partnership
• Microsoft freezes all consulting hiring through FY2025
• Consulting revenue stagnant, but cloud/AI revenue booming

🔹 The Accenture Case

• CEO Julie Sweet: “We are exiting on a compressed timeline… reskilling is not viable.”
• 40,000 ChatGPT Enterprise licenses
• Investors reward layoffs + AI investment (stock jumps 4%)

🔹 Client Behavior Has Changed

• Clients run their own AI analysis before consultants arrive
• “We yanked the dataset into Gemini — here are the 4 scenarios; validate them.”
• Projects shrink from €500k strategy engagements to €50k validations
• Consulting value shifts from “We think…” to “Show us you actually use AI.”

🔹 New Consulting Shapes Emerging

• Obelisk Model – fewer layers, senior-heavy
• Hourglass Model – AI automates the middle, small base + small middle + large top
• Box Model – stable senior cohort with small technical pods

🔹 Why AI Breaks the Leverage Model

• 1 senior consultant + AI = output of 5 analysts
• Less coaching, less overhead, no long training pipeline
• Shrinking base = collapsing partner economics

🔹 “The Gap in the Middle”

• Roles disappear before new ones arrive
• Young graduates can’t “learn the craft” without entry roles
• Partners may have no successors in 10 years

🔹 What Malcolm Sees in Real Projects

• Big consultancies unable to demonstrate hands-on AI usage
• Boutique AI-native teams outperforming traditional players
• CTOs saying: “Your consultants know nothing more than college students using AI.”

NOTABLE QUOTES

“With good prompting, clients can get 80% of the value directly from AI tools.”“Accenture’s stock went up the moment they cut 11,000 people. The market spoke.”“Clients arrive armed with Gemini deep research — and they’re not paying for interns to learn on the job.”“If you’re planning to become a partner in 15 years… I’m not sure the pyramid will still exist.”“No one at a big firm uses AI 10% as intensively as small boutiques do.”📣 WHERE TO FIND MALCOLM

• LinkedIn: https://www.linkedin.com/in/malcolmwerchota/
• Website: https://www.werchota.ai
• YouTube: https://www.youtube.com/@werchota
• X/Twitter: https://x.com/malcolmwerchota
• Instagram: https://www.instagram.com/malcolmwerchotaai/
• TikTok: https://www.tiktok.com/@malcolmwerchota

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