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 automatedWhy partners are protecting profits at the expense of the baseHow Accenture admitted it can’t retrain its consultants fast enoughWhy clients now challenge Big Four experts using AI before meetingsWhy entry consulting roles may vanish before new ones are createdWhat the “hourglass” and “obelisk” consulting models look likeWhat this means for MBA graduates, senior partners, and boutique firmsWhy the real winners are small, AI-native consulting teamsIf 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 partnersJuniors billed at 400–600 EUR/hourModel based on leverage + generalists + manual labor🔹 Why the Pyramid Is Cracking NowAI replaces research, synthesis, due diligence, basic analysisClaude/Sonnet/Gemini produce P&Ls, analysis, dashboards instantlySlide-making still manual, but everything else is automatedClients know this — and refuse to pay old prices🔹 Industry Signals & Data PointsMcKinsey, BCG, Bain freeze salaries for 3rd consecutive yearPwC cuts graduate hiring by 50%Accenture cuts 11,000 consultants, signs OpenAI mega-partnershipMicrosoft freezes all consulting hiring through FY2025Consulting revenue stagnant, but cloud/AI revenue booming🔹 The Accenture CaseCEO Julie Sweet: “We are exiting on a compressed timeline… reskilling is not viable.”40,000 ChatGPT Enterprise licensesInvestors reward layoffs + AI investment (stock jumps 4%)🔹 Client Behavior Has ChangedClients 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 validationsConsulting value shifts from “We think…” to “Show us you actually use AI.”🔹 New Consulting Shapes EmergingObelisk Model – fewer layers, senior-heavyHourglass Model – AI automates the middle, small base + small middle + large topBox Model – stable senior cohort with small technical pods🔹 Why AI Breaks the Leverage Model1 senior consultant + AI = output of 5 analystsLess coaching, less overhead, no long training pipelineShrinking base = collapsing partner economics🔹 “The Gap in the Middle”Roles disappear before new ones arriveYoung graduates can’t “learn the craft” without entry rolesPartners may have no successors in 10 years🔹 What Malcolm Sees in Real ProjectsBig consultancies unable to demonstrate hands-on AI usageBoutique AI-native teams outperforming traditional playersCTOs 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 MALCOLMLinkedIn: https://www.linkedin.com/in/malcolmwerchota/Website: https://www.werchota.aiYouTube: https://www.youtube.com/@werchotaX/Twitter: https://x.com/malcolmwerchotaInstagram: https://www.instagram.com/malcolmwerchotaai/TikTok: https://www.tiktok.com/@malcolmwerchota🧠 AI FIT ACADEMYShip First. Study Later.Working AI workflows by Week 2, or 100% refund.→ https://www.werchota.ai/ai-fit-academy

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