There is a subtle difference when you walk through any mid-size corporate office these days. There are a few more empty conference rooms. There are fewer boxes between the top and bottom of the organization charts when someone takes the time to print them.
Many of the individuals who once oversaw the Monday standups, tracked the quarterly figures, and discreetly prevented the entire machine from coming to a standstill are no longer with us. They were fired either last spring or the spring before, along with a LinkedIn post about “new chapters” and a carefully worded email from HR.
| Topic | Details |
|---|---|
| Subject | Middle Management in the Age of AI |
| Trend Period | 2023–2026 |
| Key Statistic | Middle managers made up one-third of all corporate layoffs in 2023 |
| Companies Affected | Amazon, Google, and thousands of mid-size U.S. firms |
| Industries Most Impacted | Technology, Retail, Healthcare, Finance |
| Research Sources | Gartner, Korn Ferry, McKinsey & Company, Boston Consulting Group |
| Projected Job Impact | 20% of businesses expected to slash over half of middle management positions by 2026 |
| Key Warning Voice | Deborah Lovich, Senior Partner, Boston Consulting Group |
| Reference Website | Korn Ferry Workforce 2025 Report |
Anyone paying attention should be alarmed by the rate at which middle managers—those professionals positioned between front-line employees and senior executives—are vanishing. They accounted for a third of all corporate layoffs in 2023, according to an analysis by Bloomberg and Live Data Technologies. According to Korn Ferry’s Workforce 2025 report, which polled 15,000 professionals globally this year, 41% of workers claim their employers have already reduced the number of management tiers.
According to a Gartner report from October 2024, by 2026, one in five companies will use AI to flatten their organizational structures, eliminating more than half of the middle management jobs that currently exist. Restructuring is not what that is. That is more akin to demolition.
Depending on who is speaking, companies provide different explanations. Some point to overhiring during the pandemic that just got out of control. Others speak in terms of speed and efficiency, frequently using code to cut down on the number of human intermediaries between a decision and its implementation. Some are more direct: AI can now manage performance tracking, coordination, and reporting. What’s the point of carrying the overhead?
However, there is a certain sleight of hand in this reasoning that is difficult to ignore. Even though the gap is closing more quickly than most people anticipated, what AI can accomplish and what a manager actually does are not exactly the same. You can see from a dashboard that a team’s output decreased by 12% in the third quarter.
It can’t tell you that two of those team members haven’t spoken since a poorly conducted meeting in August, or that one of them recently went through a divorce. The most effective middle managers possess this kind of knowledge on a daily basis: it is contextual, relational, and profoundly human.
Middle managers are more crucial than ever, according to Deborah Lovich, a senior partner at Boston Consulting Group who has advised C-suite executives for more than thirty years. In a time when their numbers are declining, that is a startling assertion to make. Lovich’s argument, however, is not sentimental. It’s useful.
The person who can genuinely sit across from someone and provide encouragement and assurance isn’t a platform or a predictive model in an economy characterized by uncertainty, growing burnout, and workers who are clearly losing faith in their employers. It’s a manager.
To be fair, it wasn’t worth maintaining every level of middle management. Some organizations invested years in creating bureaucratic frameworks that complicated accountability and slowed down operations. In 2020, McKinsey pointed out that reducing an overly hierarchical structure could boost productivity, cut expenses, and create more direct communication between the leadership and the workers. That’s a valid point.
The issue is that “eliminating the function entirely” and “trimming excess” are two very different operations, and it’s becoming less obvious that businesses always know which they’re doing.
The wiser course, according to Megg Withinton, vice president of enterprise analytics at HR solutions firm Insperity, is investment rather than elimination.
In contrast to the long-term costs of turnover, low morale, and the rehiring cycles that frequently follow aggressive layoffs, she contends that businesses could invest about $1,000 per employee in management training and upskilling. Many organizations may be addressing a short-term budget issue while covertly causing a longer-term culture issue.
It is worthwhile to take a moment to consider the statistics regarding the actual harm that poor or nonexistent management causes to a workforce. According to data from Insperity, only 51% of managers with less than three years of experience believe they are fully equipped to lead others. Only 20% of workers claim that their managers go above and beyond what they expect.
Additionally, according to 37% of respondents in Korn Ferry’s report, losing that middle management layer left them feeling aimless. Not freed. not in control. aimless.
In one version of this story, AI actually takes over the administrative machinery of management, including KPI tracking, task assignment, scheduling, and compliance reporting, freeing managers to focus on the most important aspects of their jobs.
In a 2023 report, McKinsey discovered that companies with high-performing managers typically generate higher shareholder returns than their peers. It’s not a soft benefit. That gives you a competitive edge. Additionally, those businesses developed it by viewing managers not as a cost line to be eliminated but rather as agents of culture and execution.
According to Withinton, businesses must first implement AI and make it function within their particular organization before they can conclude that AI renders the managerial role obsolete or diminished. No vendor demo can convey how difficult and messy that process is.
And managers are in the best position to lead teams through that shift, ensuring that the technology is being used properly, that no one is left behind, and that the digital and human systems are truly collaborating. You don’t get a flat, agile organization if you cut them before the AI is ready. You receive one that is perplexed.
Nevertheless, there is an unsettling question that hangs over all of this. Are today’s middle managers effectively training their own replacements by leading their teams into an AI-driven future? Nobody in the corner office seems to want to say that aloud. One removed box at a time, the org charts are already telling the story, so perhaps no one needs to.
