Middle Management vs. AI: What Companies Risk When They Cut the Middle Layer
What do an umbrella and a microphone have to do with management? In this article, Simone Sullivan explores the roles of middle managers and the potential risks and costs of companies cutting the middle layer in favour of AI and flat structures.
A wise colleague of mine once shared during a session for senior leaders that the two most powerful tools a manager has is an umbrella and a microphone.
The umbrella can be used to shield their team from unnecessary bureaucracy from the top, allowing people to focus on work that matters. The microphone, on the other hand, is used to shout out their colleagues to celebrate wins, amplify ideas, and ensure voices are heard.
Together, these tools represent the importance of middle management and its role. But what happens when the tools are taken away or, worse, the managers themselves?
This is the scenario playing out in many organisations today. In a wave of restructuring aimed at ‘flattening structures,’ middle managers are being cut or replaced by AI and hopes of self-organising teams. The promise? Lower costs, faster decisions, and empowered employees. While appealing, the realities can be more complex, and far riskier.
The Business Case
For many businesses, reducing middle management appears to be a logical step. According to Gartner, by 2026 20% of organisations will have used AI to eliminate 50% of middle management roles.¹ The idea is appealing: leaner structures, quicker decisions, and significant cost savings.
Additionally, AI is being positioned as a manager’s replacement, handling reporting, workflow allocation, and even elements of performance monitoring. Combine this with agile structures and self-managed teams, and it seems we’ve found a smarter way to work.
But the real cost of cutting the middle is often overlooked.
The Hidden Costs
Looking beyond the cost-cutting tells a different story. Below is a summary of the potential costs that come with removing or reducing middle management.
Increased Burden on Senior Leaders
Decision-making doesn’t disappear; it simply shifts upward. Without middle managers, senior leaders can become more involved in operational concerns, leading to burnout and strategic distraction. Instead of focusing on vision, they’re pulled into the weeds.
Communication Breakdowns
Middle managers serve as the bridge between strategic intent and daily execution with their teams (remember the umbrella?). Remove them, and communication becomes slower, less accurate, and disconnected.
Erosion of Culture and Engagement
Middle managers are often the culture carriers. They drive morale, reinforce values, and provide emotional support. Forbes recently reported that cutting this layer leads to burnout, disengagement, and the erosion of company culture.²
Loss of Advocacy
Middle managers act as dual advocates, translating leadership messages for their teams and voicing team concerns back up the chain (remember the umbrella and microphone again?). Without them, employee voice weakens.
A Broken Leadership Pipeline
The mid-layer is also where future senior leaders are developed. According to Deloitte, organisations with strong middle management see up to 15% better financial performance than those without.³ Cutting this layer disrupts succession planning and stunts talent development later down the line.
Rethinking the role
If you’re questioning the value of your middle managers, it may be time not to remove them, but to reset and rebrand their role in your organisation. Flattening doesn’t mean leadership disappears. And AI, for all its promise, can’t replace the advocacy, trust, and communication that skilled managers bring.
The middle still matters, and in the age of digital transformation and complex human dynamics, it might just matter more than ever.
