As artificial intelligence (AI) rapidly advances, its influence on organizational structures—especially middle management—is becoming increasingly clear. A recent Gusto report analyzing data from 8, 500 small businesses across various industries highlights a significant transformation in how companies manage their teams. The report’s key finding shows that the ratio of individual contributors to managers has nearly doubled in recent years. In 2019, a single manager typically supervised just over three employees; by 2025, this figure is expected to approach six. This development, commonly called the “Great Flattening, ” indicates a wider trend toward flatter hierarchies where managerial layers are reduced. Organizations are adopting flatter structures by leveraging AI and new technologies to streamline operations and boost efficiency. This shift is especially noticeable in the tech sector, with companies like Microsoft leading the way. Microsoft's recent announcement to cut 9, 000 jobs as part of its AI-driven restructuring exemplifies the broader effort to cut bureaucracy and empower larger teams equipped with advanced technological tools. The hospitality and service sectors have also spearheaded this evolution, exhibiting a significant reduction in management layers. Traditionally known for complex and dense management hierarchies, these industries’ adoption of AI and automation has enabled them to simplify leadership structures and rethink team coordination. As a result, they can operate with leaner management while maintaining or even enhancing operational effectiveness. Nevertheless, moving toward flatter organizations brings challenges. Gusto’s study warns that industries with more management layers often report higher worker productivity, indicating that middle managers play a vital role in coordinating activities, offering guidance, and sustaining employee morale.

Reducing these roles may sometimes cause coordination difficulties or place excessive burdens on managers overseeing larger teams. Moreover, the cultural view of middle managers is shifting. Once seen as crucial pillars within organizational command chains, middle management roles are now often met with irony or humor, reflecting a decline in perceived importance and questioning their necessity in today’s workplaces. This social change parallels the practical restructuring many companies are undertaking. Looking forward, an evolving workplace will likely need a balanced approach. While AI can drive greater efficiency and support flatter hierarchies, businesses must also value skilled managers' roles in fostering communication, mentorship, and engagement among employees. AI and technological progress are reshaping corporate culture, demanding adaptability from both leaders and staff. In summary, as AI continues to reshape business operations, the traditional middle manager role is undergoing dramatic transformation. Organizations are moving toward managing larger teams with fewer supervisors to leverage technological advantages for improved efficiency. However, this may sacrifice certain qualitative benefits that managers provide. This phenomenon, reflected in tech giants’ restructuring and changes in industries like hospitality, highlights a significant cultural and operational shift in business management. Striking the right balance between embracing AI-driven innovations and sustaining effective management structures will be crucial for companies aiming to stay competitive in the future.