As middle management jobs shrink, workplace experts say executives may be underestimating just how crucial these roles are to their companies — especially in the age of AI.
The ranks of middle managers, the professionals that bridge senior leaders with frontline employees, have been thinning in recent years. Middle managers made up one-third of all layoffs in 2023, a Bloomberg and Live Data Technologies analysis found. This year, 41% of employees say their companies trimmed down their management layers, according to organizational consulting firm Korn Ferry’s Workforce 2025: Power Shifts report, which surveyed 15,000 professionals worldwide.
The trend is expected to continue into 2026: One in five (20%) businesses are expected to use AI to flatten their organizational structure, slashing over half of current middle management positions, an October 2024 report from research and advisory firm Gartner found.
The layoffs span from major public companies like Amazon and Google to smaller businesses in the U.S., particularly in industries like tech and retail. Some of these companies say they’re rectifying pandemic-era over-hiring. Others say they’ve laid off middle managers as they seek faster, more efficient workflows, and still others cite downsizing due to economic pressures, according to a recent Harris Poll survey on behalf of staffing agency Express Employment Professionals. And while the timing may be coincidental, the tightening comes as some CEOs mandate using artificial intelligence to accomplish work tasks before requesting more headcount.
While there can be some upsides to trimming layers of ineffective management, leadership and management experts warn against cutting too deep. They say these positions are a necessary puzzle piece for a successful workplace.
“Middle managers are more important than ever,” says Deborah Lovich, a C-suite advisor and senior partner at Boston Consulting Group who has counseled leaders on how to improve the employee experience for over 30 years.
In today’s rapidly changing and uncertain economy where employees are experiencing increased burnout and dissatisfaction and lower confidence, Lovich says middle managers are the ones who can give them the motivation and reassurance they need to be productive.
Well-equipped managers aren’t just an ‘expense’
Amid higher inflation, tariffs and economic concerns, many companies are tightening their belts. Middle managers, who typically have higher salaries, can often be the first target in leaner times.
To be sure, there can be benefits to thinning out excessive layers of hierarchy.
Cutting back on middle managers can help businesses reduce costs, encourage more collaboration between frontline employees and senior executives, and increase a company’s overall speed and efficiency, according to a 2020 report from management consulting firm McKinsey & Company.
That doesn’t mean middle management roles should be eliminated altogether or indiscriminately, says Megg Withinton, vice president of enterprise analytics at HR solutions company Insperity. Instead, she says, these professionals should be better equipped to do their jobs.
A competent middle manager builds motivation and productivity for their team and plays a significant role in company culture, says Lovich.
In contrast, ineffective middle managers — whether due to inexperience, poor job fit, vague guidance from their own bosses or another reason — can weaken performance and morale. Only 51% of newer managers with less than three years of experience feel completely prepared to lead others, according to Insperity’s data. And only 20% of employees say their managers exceed their expectations, according to a recent Insperity survey of 1,000 U.S. executives, managers and frontline employees.
One potential solution, suggests Withinton: Companies could invest in management training and upskilling, rather than using layoffs as a short-term fix. Upskilling isn’t free, of course. But spending about $1,000 per employee to train and develop your talent may have better long-term outcomes, Withinton says, considering turnover costs and lost employee trust and morale — especially for companies that eventually rehire after layoffs anyway.
Besides, effective management is about more than money, says Withinton. Some workers find that their work is more difficult when their immediate manager is cut. In Korn Ferry’s report, 37% of survey respondents said that not having that middle management role left them feeling directionless.
“I would really encourage people to think about managers not as an expense or an administrative or bureaucratic layer, but an agent for change,” she says. As organizations rethink their strategies and workflow to be more AI-forward, managers can help guide their teams to use the technology effectively, instead of fear it. “[Especially] in a time where things are changing week to week, and we’re all just going to be scrambling to keep up for a while as this new [AI-driven] world unfolds.”
How to use managers to their full potential
Managers provide the most value when they’re keeping their teams accountable and helping workers feel motivated and supported, says Lovich — not necessarily when they’re handling administrative tasks like coordinating meetings or tracking employees.
The emotional element of management is particularly important in the age of AI, she notes. The tech can and should be used to augment managers’ abilities to complete administrative tasks, but can’t authentically congratulate an employee on a job well done or notice that they’re a little down and not themselves on a given day, Lovich says.
Manager training should emphasize skills like fostering interpersonal relationships, effective communication, decision making and accountability, conflict resolution and building trust within teams, according to Insperity performance consultant Chris Brennan.
Organizations that use their managers to their full potential reap significant benefits, Insperity’s survey found: Their employees are five times more likely to report a healthy workplace culture and four times more likely to understand and align with company goals. What’s more, companies with high-performing managers tend to yield higher shareholder returns than their counterparts, according to a June 2023 report from McKinsey and Company.
Those advantages will be especially important as organizations start to integrate artificial intelligence into their workflows, Withinton says.
“Before we all leap to ‘AI is going to make the role of manager either obsolete or much more reduced,’ you actually have to deploy AI and make it work for your company,” Withinton says. “And the managers are the people who are going to be able to really make sure that it’s being used in the appropriate way day to day. There is no other way around that.”
Still, a looming question remains: By helping facilitate the transition to AI, are today’s managers positioning themselves to be increasingly obsolete tomorrow? Time will tell.
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