Major technology companies are aggressively restructuring their organizations by eliminating middle management layers, betting that artificial intelligence can enable leaner operations with fewer supervisors and lower overhead costs. Coinbase, Amazon, Meta, and Block have all announced significant workforce reductions with a specific focus on removing management positions, arguing that AI tools make traditional hierarchies obsolete and allow companies to operate with greater efficiency and faster decision-making.
Coinbase laid off 14% of its workforce last week while explicitly gesturing to AI-fueled, minimal-management efficiency. The company announced it will no longer employ "pure managers," instead requiring all managers to directly contribute code and other work while overseeing 15 or more direct reports. "We're fundamentally changing how we operate: rebuilding Coinbase as an intelligence, with humans around the edge aligning it," CEO Brian Armstrong said in a tweet announcing the restructuring.
The Efficiency Argument
The push to thin management ranks reflects a broader conviction among tech leadership that AI enables fundamental organizational redesign. Anastassia Fedyk, assistant professor at the University of California, Berkeley's Haas School of Business, has studied how AI is changing workforce composition and found that as AI tools make it possible to shift more work from managers to their reports, these companies' structural changes could become more permanent.
Meta and Amazon were among the first major tech companies to suggest the need to flatten management structures for the AI era. In 2023, Mark Zuckerberg announced what he called the "year of efficiency," in which he planned to flatten the organization. Two years ago, Amazon CEO Andy Jassy told employees he planned to increase the ratio of employees to managers by at least 15%—a goal the company reached one year ago—to give workers a greater sense of ownership and reduce bureaucracy. Fast forward to January 2026, when Zuckerberg discussed flattening the company's management structure during an earnings call, and both CEOs now believe AI is fundamentally changing how work gets done.
Jassy has suggested Amazon "will need fewer people" doing some jobs, while Zuckerberg stated that Meta is "starting to see projects that used to require big teams now be accomplished by a single very talented person."
Block, which laid off 40% of its workers in 2026, has taken the restructuring furthest. Under its new AI-oriented structure, some engineering managers were assigned as many as 175 direct reports, according to internal organization charts. Block's approach splits management duties: AI is primarily responsible for sharing information between managers, their reports, and other teams; workers called "directly responsible individuals" oversee strategy and priorities; and individual contributors called "player-coaches" manage employee growth. "There is no need for a permanent middle management layer," reads a statement from CEO Jack Dorsey and board member Roelof Botha.
The Human Cost and Operational Risks
The restructuring is creating significant pressure on remaining managers and raising questions about whether the efficiency gains justify the organizational strain. Prateek Singh, a software development manager who left Meta at the end of April after joining in June 2025, observed firsthand how the flattening was reshaping the role. Just a few months after he joined, managers on certain teams saw their number of direct reports jump, and managers were increasingly expected to contribute code—a dramatic shift from the traditional division of labor where managers delegated and guided while individual contributors executed tasks.
To manage the expanded workload, Meta's managers turned to AI tools to help draft documents, consolidate notes, and evaluate employees. Singh switched his one-on-one meetings with his seven direct reports from weekly to every other week, using AI agents—bots that do not need human intervention to execute tasks—that connected with his direct reports' agents to collect updates and provide feedback. While the strategy seemed functional for his team, Singh acknowledged the risks. "If managers are expected to either be writing a lot more code or have a lot more reports, what I see happening is more asynchronous, agent-driven management," he said. "Then people lose touch with all the benefits you get from face time," like mentorship, human judgment and guidance.
Emily Rose McRae, an analyst at Gartner who studies AI's impact on the future of work, warned that the changes are creating a cascading pressure throughout organizations. "The middle manager role is about to be under a lot more pressure," she said. "What that means for employees is that your job gets harder, too. When your manager doesn't get the support they need, you don't get the support you need."
Freeland Abbott, a former technical lead at Square (Block's digital payments service) who was laid off in February, expressed concern that the more human aspects of management could be lost. "AI cannot provide team motivation, human connection or support in the way a person can," Abbott said. He also worried that off-loading employee development to same-level colleagues could disadvantage less-experienced and marginalized teams.
Singh raised another concern: managers under increasing pressure could be tempted to use AI for decisions and blindly submit flawed suggestions, potentially compounding as other teams build on those decisions and leading to data leaks, security holes, or system outages.
Broader Workforce Implications
The trend extends beyond the largest tech firms. At the end of 2025, openings for middle manager jobs in the US had fallen by 42% compared with a peak in 2022, according to research from workforce data platform Revelio Labs. Managers comprised 13% of the US workforce in 2022, making this a significant structural shift in the labor market.
Raffaella Sadun, a Harvard professor who studies the future of work, noted that tech companies are well-positioned to make such radical changes due to their technological sophistication, but warned that "they'll have to incur the cost of change" like overhauling how work is coordinated, altering how decisions are made, and shifting workers into different positions, including demoting them.
McRae cautioned that reducing the number of middle managers is likely to complicate a job that is already incredibly stressful. She noted that many managers across industries would choose not to be managers again if given the choice, based on Gartner surveys. As companies reduce their overall number of managers and require remaining managers to do even more work, this dissatisfaction could worsen. Additionally, fewer layers of management means employees will have fewer opportunities to advance, potentially causing companies to lose important talent.
Amalia Goodwin, global managing director of the consulting firm Slalom, emphasized that simplifying the management structure requires an entire redesign of how work gets done, giving more authority to lower levels to make bigger decisions alone. "If more employees are making more decisions, they will need the resources, skills and training to be able to judge between good and bad outcomes," she said. She also warned that work could slow down in unintended ways—for example, if one team produces more with AI assistance, the team responsible for approving that work may become overwhelmed.
Skepticism About Long-Term Viability
Some experts question whether the tech industry's experiments will prove sustainable. Matthew Bidwell, management professor at the University of Pennsylvania's Wharton School, noted there is a history of companies attempting to break old hierarchies with new management forms, but such experiments are often abandoned or serve as one-offs. He cautioned that reducing management layers means "one fewer layer of kicking the tires." While organizations will move faster, "you'll break more things, and for some organizations that's probably not the right trade-off."
Singh, now employed outside Silicon Valley, decided the experiment was too risky for his career. "It's just too early in the experiment," he said. "I didn't want to be the guinea pig."
Abbott does not expect the extreme management ratios, such as Block's 175 direct reports per manager, to last, saying that companies will recognize the need for more humans even if the role is not called a "manager."
Why This Matters:
The wholesale elimination of middle management represents a significant organizational and economic experiment with potentially far-reaching consequences. From a fiscal perspective, tech companies are pursuing substantial cost reductions through workforce compression and flattened hierarchies, which directly impacts their bottom lines and shareholder returns. However, the sustainability of these changes remains uncertain. The structural risks identified by management experts—reduced quality control, slower decision-making in unexpected areas, loss of mentorship and employee development, and potential security vulnerabilities—suggest that the efficiency gains may come with hidden costs that only become apparent over time. The 42% decline in middle manager job openings since 2022 indicates this is not a temporary trend but a fundamental shift in labor market demand. Whether tech companies will ultimately determine that AI-augmented lean management proves superior to traditional hierarchies, or whether they'll quietly restore management layers as operational problems accumulate, will have significant implications for organizational structure, workplace culture, and career advancement opportunities across the broader economy.