Graduate roles at the Big Four accountancy firms are being replaced by AI, while many others have already been offshored. Who will survive the crisis in consultancy? View in browser | Barney Macintyre • Friday 18 July 2025 |
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Long stories short- UK unemployment hit 4.7 per cent, its highest rate in four years.
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Consultancy job crunch Consultants are facing the awkward task of researching AI-driven job cuts within their own industry. This week a McKinsey report found that job vacancies in the UK economy fell by 43 per cent since 2022, with the decline in postings for white collar jobs nearly twice the decline seen elsewhere.
So what? Across the professional services sector there's a dawning realisation: the disrupters have become the disrupted. This crisis in consulting includes
- the replacement of entry-level and graduate roles with AI;
- a reduction in the money spent on consultants by governments, especially in the US and UK; and
- lingering reputational problems linked to firms' work, whether it's marketing for opioid companies or drawing up reconstruction plans for warzones.
Rightsizing, as firms prefer to call it, was inevitable after the post-Covid consultancy boom was punctured by sluggish growth and higher borrowing costs. But recent data shows agentic AI's ability to knock together a passable PowerPoint presentation or research document has caused severe attrition to roles at the lower end of the pay scale.
Not so Big Four. This is particularly evident in a subset of professional services. The four major accounting firms – Deloitte, EY, PwC and KPMG – posted 44 per cent fewer job adverts for graduates this year compared with 2023.
"Historically, accountancy firms have typically had a pyramid structure – wide base, heavy graduate recruitment," said Ian Pay from ICAEW, the industry body for chartered accountants. "Firms are now starting to talk about a 'diamond model' with a wide middle-tier of management because, ultimately, AI is not sophisticated enough yet to make those judgement calls."
Cuts to graduate cohorts since 2023 have ranged from 6 per cent at PwC to 29 per cent at KPMG. According to James O'Dowd, founder of talent advisers Patrick Morgan, these have been accompanied by senior employees being paid more and the increased offshoring of jobs. |
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Going global. Up to a third of some firms' administrative tasks are carried out in countries such as India and the Philippines where labour costs are lower. "There's no secret that bigger firms have been doing offshoring for quite a long time," Pay said. "Firms slightly lower down the chain have been starting to explore it too." According to research by Patrick Morgan, last year
- Deloitte cut year-on-year headcount in the Netherlands by 5 per cent, and increased its workforce in Malaysia by 9 per cent;
- KPMG cut headcount in the UK by 7 per cent and raised it by 10 per cent in Pakistan;
- EY cut its Germany office by 6 per cent and grew in Indonesia by 7 per cent; and
- PwC, following an accounting scandal in Australia, cut its workforce there by 18 per cent, while increasing roles in Mexico by 12 per cent.
Pressure on. Competition is also heating up in the sector, partly driven by private equity's growing interest in buying and scaling smaller firms. PE-backed deals for accountancy companies in Europe rose from 10 to 20 deals in the years before 2022 to more than 100 in 2023 and nearly 200 in 2024.
"I think you're going to see genuine competitors to the Big Four over the next one or two years," O'Dowd said. "Private equity and AI influence is highlighting that the operating models of a lot of these older firms are quite inefficient … The question they should ask is: 'How do we change our talent, mix our people, our systems, our operating model to make it through the valley of death?'"
What's more… Similar problems are faced by the likes of McKinsey, BCG and Bain. The industry that made disruption a cult is now getting a taste of its own medicine. For the graduates who do make it through, their jobs could look very different indeed. |
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