Feel like your boss has been stretched thin lately? You’re not imagining it. A new report says managers are now juggling twice as many employees as they were five years ago. Artificial intelligence and automation are reshaping organizational structures, and as a result, middle managers are quietly being phased out, a shift that could create challenges for future workers hoping to climb the corporate ladder.
With fewer managers, small teams are taking on bigger workloads
AI has become second nature in our workdays—summarizing meetings, highlighting important emails and clarifying points of confusion when no one else is available. Tools like chatbots and personalized intelligent agents promise significant productivity gains. But as these technologies embed themselves deeper into our workflows, not just our systems, it begs the question: Are managers still necessary when AI can resolve issues independently?
According to a Gusto report reviewed by Axios analyzing 8,500 small businesses, the ratio of individual contributors to a single manager has nearly doubled, from just over three in 2019 to nearly six today. As middle managers juggle team coordination, upward communication and consistent execution, they’re increasingly being asked to bridge widening operational gaps. Despite advancements in AI, many of these boots-on-the-ground responsibilities remain outside the scope of what automation can currently deliver.
Even in an industry poised for an employment boom and a surge in demand for expertise, the tech sector has provided a stark example of where AI’s impact could be headed. In 2025, tech companies have continued to downsize, laying off thousands and shifting strategies, all in favor of fewer employees and greater efficiency. This trend, driven by AI automation, not only reduces the number of jobs but also eliminates many high-value roles that traditionally allowed employees to expand their portfolios and take on greater responsibilities. These concerns have prompted many new graduates and job market entrants to abandon once-coveted STEM positions, instead pursuing blue-collar roles that seem more secure and less vulnerable to technological disruption.
How technology is changing the power balance at work
Even small businesses nationwide, from local eateries to tech startups, are becoming more strategic about growth. Rather than increasing managerial roles, they’re adopting innovative technologies to optimize efficiency and reduce expenses in areas that don’t directly contribute to their core mission. For these companies, expanding their workforce often complicates problems that could be solved more cost effectively with digital tools.
According to the most recent ADP report, private payrolls dropped 33,000 jobs in June—the first decline since March 2023.
Employees already within companies aren’t necessarily seeking more authority in the workplace as a result of job cuts though. Thanks to AI tools, they can often find solutions, ask questions and make key decisions without waiting for approval or consulting someone in leadership. Some companies even design their AI chatbots to embody company values and policies, allowing employees to get quick permissions for minor tasks without any human intervention at all.
Tech firms are using layoffs and leaner teams to drive greater impact
Industry leaders have long championed flattening management structures to cut costly layers. During Meta’s 2023 efficiency initiative, CEO Mark Zuckerberg reportedly said, “I don’t think you want a management structure that’s just managers managing managers… managing managers, managing the people who are doing the work.” The company has since reportedly cut more than 22,000 jobs.
Years ago, Jeff Bezos introduced Amazon’s “two-pizza team” rule—keeping teams small enough to be fed with two pizzas—to encourage nimble decision-making and reduce managerial overhead. The notion isn’t novel, but now it holds a much clearer path to execution.
In the July issue of Harvard Business Review, Harvard professor Manuel Hoffmann and his team unveiled findings from a study of 50,032 developers conducted between 2022 and 2024. Half the developers used GitHub Copilot, an AI tool for code generation. Analyzing over 2.4 million actions, the team found that Copilot users spent 5% more time coding and 10% less on project management. In industries like software development, AI helps teams focus more on core tasks and less on the meetings, prep and brainstorming that often slow progress.
The rise of AI will redefine management, potentially for the better
Though artificial intelligence is fundamentally rewriting the rules of workplace power dynamics, hierarchical structures and how approvals are granted, its effects remain complex and uneven. For managers relieved of routine administrative burdens, the role is far from obsolete, yet it is changing in subtle ways. As generative AI takes on tasks like scheduling, coordination and quality assurance, those who remain in managerial positions may find themselves less tied to the minutiae of oversight.
At the same time, employees gain more space to focus on their core work, designing personalized AI tools to assist them and creating workflows that emphasize discovery and impact over control. This shift fosters a more agile, human-centered workplace where leadership involves not just directing people but interpreting and integrating technology. As leadership evolves alongside AI, it challenges us to reconsider who truly holds power when humans and algorithms collaborate.
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