Continuing our exploration into the surprising trend of companies reverting to traditional and, some might argue, outdated management practices, today I want to tackle another provocative question: Is there still value in the role of managers?
Recent trends indicate a growing skepticism toward middle management. Deloitte’s 2025 Global Human Capital Trends report highlights a significant decline in middle management roles. Astonishingly, the data shows U.S. companies advertised 42% fewer middle-management positions at the end of 2024 compared to early 2022. Gartner goes further, predicting that by 2026, around 20% of organizations will have used artificial intelligence (AI) to eliminate over half their middle-management positions.
Why Are Companies Reducing Managerial Roles?
Companies offer several reasons:
- Cost Reduction and Efficiency: Removing managerial layers can reduce overhead, streamline processes, and speed up decision-making.
- Automation and AI Integration: As AI increasingly handles routine administrative tasks, the necessity of traditional managerial oversight diminishes.
- Increased Agility: Flatter organizations promise quicker responses to market changes and faster innovation.
Why Managers Still Matter
But there’s another side to this story. Deloitte itself cautions against overly simplistic assumptions. While acknowledging the practical benefits of a leaner organizational structure, they emphasize the ongoing importance of managerial skills, including:
- Coaching and Development: Effective managers coach employees, developing their skills and nurturing their potential, something AI struggles to replicate.
- Exercising Human Judgment: Managers bring valuable insights, intuition, and contextual understanding, especially in complex decision-making scenarios.
- Building Trust and Psychological Safety: Great managers foster environments where employees feel safe to innovate, speak openly, and collaborate—crucial elements that drive long-term success.
Real-World Consequences of Cutting Managers
Companies drastically reducing middle managers often face unintended challenges. Employees in flatter structures can feel unsupported, unclear on roles, or overwhelmed without adequate guidance. As the Forbes article “Amid 2024 Mass Office Returns, Conflict Spikes And Productivity Drops” highlights, sudden organizational shifts—like cutting managerial layers—can increase workplace tension, confusion, and ultimately, reduce productivity and employee engagement.
My Take: Managers in an AI-Enhanced Workplace
Here’s what really catches my attention: Could reducing managerial roles reflect preparation for a future workforce heavily influenced by AI and automation? It’s entirely possible that companies are reshaping their structures not merely for efficiency, but to accommodate an increasingly AI-driven workforce. Clear, streamlined organizational structures might indeed become essential in managing hybrid human-AI teams effectively.
However, let’s be cautious. While embracing technology and efficiency is necessary, completely undervaluing the role of effective human managers could backfire spectacularly. Organizations might instead benefit from redefining and enhancing the managerial role—leveraging AI to support, rather than replace, human judgment, empathy, and coaching capabilities.
Next week, I’ll examine another one of these traditional management trends making a comeback. Stay tuned as we continue to navigate these evolving workplace dynamics.
