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The UK's Big Four accountancy firms are potentially undermining the industry's future, as they slash graduate recruitment by up to 29% while embracing AI to automate entry-level tasks. KPMG has led the charge with the steepest cuts, reducing 2023 graduate intake from 1,399 to just 942, while Deloitte, EY, and PwC have followed suit with reductions of 18%, 11%, and 6% respectively.
The job cuts come as the firms look to preserve seven-figure partner payouts amid a post-Covid consulting slump and shrinking client budgets. Alongside job reductions, all four firms have expanded their offshoring efforts. The Big Four are looking at AI to replicate junior work more cost-effectively, leveraging GenAI tools like ChatGPT to handle administrative work traditionally performed by graduates. In parallel all are also looking to AI as a significant revenue generator, for example developing AI assurance services – auditing tools that verify the performance and safety of AI models.
Jon Bance, COO at technology consultancy, Leading Resolutions, argues that firms are making "critical errors" by axing entry-level teams to address wider inadequacies.
"Graduate roles are intended to be necessary training for the industry professionals of tomorrow," Bance explains. "Replacing them entirely with AI tools may be a short-term fix and efficiency burst, but ultimately damaging to the industry long-term, as talent is no longer gaining experience." Bance advocates for "resource augmentation" rather than replacement, emphasising that AI should serve as a smart partner while humans maintain control over strategic decisions.
I completely agree with Jon’s comments, and from a logical (and moral) perspective it makes perfect sense, the challenge remains that it is far too easy to cut costs by just reducing headcount, and in certain tasks without much of a drop in performance, a problem that will only increase as AI capability matures. We have heard the tag line ‘AI will only augment not replace’ so much from both government and private organisations, but I really have to question who they are trying to convince (or dupe)? It has been clear to me for a long time that job cuts at both entry level and process heavy positions are going to be hit hard by AI, and this is only just the beginning of what is going to be a transformation of the workplace across many sectors.
As for the consulting sector, its strength has historically relied on nurturing junior professionals who develop the contextual understanding, strategic thinking, and client relationship skills that AI cannot replicate. Eventually those people at the top of the tree will need replacement, the same could be said for skill development in numerous other disciplines as well. A better balance between AI driven cost cutting and talent development clearly needs to be found.
Posted by: Simon Baxter at 09:22
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