The recent announcement that the consulting firm McKinsey would be laying off thousands of its workers perhaps came as no surprise to those who followed the company, but it certainly generated an enormous share of commentary online, both inside and outside the industry.

After all, here was a top management consulting firm that had made its name by helping other companies become ruthlessly efficient, frequently working to identify cost-cutting measures, which often resulted in significant job cuts for the client’s employees.

The irony that it came back to hit McKinsey was lost on no one and perhaps generated more than the usual share of schadenfreude online. As one person on Reddit recently suggested: “I never wished a man dead, but I’ve read some obituaries with great pleasure.”

Of course, people shouldn’t delight in watching any group of human beings lose their jobs (whatever the reason). But this is likely a harbinger of more things to come.

We see it happening in marketing and many other fields right now. Today, AI is perhaps the main culprit. But the truth is American corporations, in particular, have been on this path for the last 40 years or so.

The Rise of the MBAs in the 1980s and Their Ruinous Recommendations

In the early 1980s, many people, in one form or another, worked a 9-to-5 job for all intents and purposes. They got up, went into the office or maybe a manufacturing plant, came home, and then had a life after work. There were certainly shifts back then and it wasn’t always strictly 9-to-5 but generally many people in this country worked a more humane 8 hours at a time.[1]

That changed with the rise of the corporate MBAs in the mid-1980s. Graduating from schools such as Wharton or Harvard Business School, they started to spread their gospel of profit maximization and other operational principles they had learned.

The MBAs understood that, to achieve what they sought, it would be hard slog to change any given companies’ products or services to increase the revenue side. The easiest path to profitability? Identify places to streamline. So, these new graduates went out to companies around the globe. “Cut costs” at workplaces and “make operations more efficient and more competitive” became the rallying cry.

That was fine on the one hand. Many companies were most certainly bloated back in the 1980s. And some of the rigor that was applied at that time was more than appropriate, helping companies become more fit and capable of competing in what was then just becoming a global commercial era.

But like everything we do in this country, we started taking this efficiency to extremes and many of the executives in charge, spurred on by Wall Street and their hired MBA consultants, simply got greedy.  After all, the bigger the profit, especially when it came from streamlining the cost side, the better the stock price and the resulting pay packages of the C-suite leaders.

Never mind that the average worker who remained didn’t always share equally in the upside and had to now work harder – and longer – with all the cuts to staffing and resources.

In the process, the hollowing out of the middle class began. And ever since, American companies have been adopting this as their core operating model, focusing more and more on EBITDA while ignoring the effects on average people.[2]  

How Could Efficiency Be a Bad Thing? For One, the Customer Experience Inevitably Suffers

On the surface, don’t we want our company or companies to be more efficient? To produce more with less resources? Of course. It allows us to keep the price of our products and services more competitive.

But when you do that in a blanket fashion as a company, especially in terms of eliminating headcount, you nearly always affect critical customer facing areas.  

I was recently on a flight to Cleveland on American Airlines. It was a beautiful day and the plane was all set to leave. There were no mechanical issues, no weather delays, and we’d been cleared to go out on time. The problem: American didn’t staff enough pilots or flight attendants for the plane. So, we waited 5 hours until they could find someone to fly the plane. 

When a crew finally did arrive and we got on the plane, the pilot apologized profusely but said American was short resources and staff with all the recent cuts, which put all the customer-facing roles in a lot of stressful situations with the passengers.

When we finally arrived in Cleveland, it was late (close to 11:00 p.m.) and there were no gates available with so few American staff working, so we sat on the tarmac for 30 minutes.

In short, this was a pretty terrible customer experience that was completely unnecessary given the circumstances, enough to make one never want to fly that airline again, despite any low cost pricing the company might provide in the future.

Efficiency Focuses on the Company Bottom Line, Not Externalities or the Societal Good

Ah, free-market capitalists. They’ll tell you it’s not the company’s responsibility to look after societal good. That the market will take care of that issue because other companies that do take better care of the societal good part will eventually win out. This is what many of the billionaires in the U.S. are pushing for right now. 

The problem with this completely unregulated free-market capitalistic approach is that it only works in a society that has access to all the information and that the consumer has the time or desire to care enough to stay informed.

In most cases they don’t – or don’t have access to the right information to make any number of choices.

So, what happens? Companies have to cut corners and shield that information from the public, which in many cases they do. Think about all the oil companies that pollute the environment, fertilizer companies that poison the soil, or food companies source cheap or harmful ingredients to manufacture food that people eat.

Then, there is the jobs issue.

In the not-too-distant past, a layoff wasn’t the end of the world for most workers. After all, outside of perhaps the Great Depression, the market has always typically been robust enough to find another job when companies downsized, especially if one moved or reskilled. But today, especially with the advent of AI, there isn’t an organization out there that isn’t thinking about this push for efficiency.

What happens if all those companies do this at once, which is essentially what is happening today?

There is no labor mobility. Many people are and will be out of work.[3]

And companies, thinking inwardly only, will focus on immediate-term profit. They’re not thinking about the greater good.

But what happens when all these are unemployed people don’t buy new cars, appliances, goods, or services?

In a way, unless companies specifically market to the ultra-rich, we’re coming to a period where many will have to start contemplating this question of keeping human jobs if only to keep up demand for their own products and services.  

A Final Casualty of Efficiency: The Loss of ‘Great’  

Marketing, law, research, consulting, HR/training, sales, design, and many other fields stand to perhaps lose out the most in this race to ruthless efficiency. After all, if a machine can do better than the average person in these areas very soon, it will almost certainly make sense to replace people in many of those roles.

The issue is that (at least in the immediate term), this will ultimately result in a lot of “average” experiences and average outcomes. Great, as we’ve talked about previously, can only be achieved through nuance and finesse, which machines right now aren’t able to comprehend because they don’t quite understand the little things that happen between people.  

It doesn’t matter if it’s a film you’re watching or a product you use; that little thing that makes something great versus good will likely be gone in this new era.

For some companies that brand themselves or have become known for being “great” at something, this will inevitably have to be one of the bigger considerations.

Balancing Efficiency with the Human Element

The truth is, much of this will be coming to a head very soon. For example, what happens in a world where costs go to essentially zero? Where machines having achieved super intelligence are powered through renewable sources and replace whole workforces, including CEOs? Are entire-machine corporations going to then take on any human-based ones remaining?  

That’s not too far-fetched. But what will they sell? To who?

In other words, if we continue this march down the path of ruthless efficiency, we’re almost certainly going to pay the price for it one way or another. Perhaps it’s time for all of us to pull back on that ruinous path that we were put on 40+ years ago, to realign our corporate focus away from strictly profit to societal good and people, before it’s too late.   

[1] And yes, there were certainly exceptions back then – investment banking and/or some creative fields where work would extend far beyond those hours – but, for many Americans, a 9-to-5 job was pretty much life back then.

[2] I thought this characterization by Grace Wang was spot-on.

[3] Recently, I’ve certainly read the studies that suggest AI will create jobs in the future. But the question is, based on what evidence? The past? This technology and where it is headed bear no resemblance to anything created in the past. And many of those studies come across as simply hopeful optimism more than anything else. If you want to read what’s really going on, this is probably more accurate: https://www.wsj.com/economy/jobs/2026-job-hiring-growth-plans-10bc3470?mod=hp_lead_pos1