The phrase most commonly used in corporate announcements right now is "flatten the structure." What that means in practice is that the person who used to sit between you and the C-suite is being removed, and their responsibilities are being split between AI tools and whoever is left.
Amazon cut 14,000 corporate roles in October 2025. Its senior vice president of people operations wrote in an internal memo that the company needed fewer layers and more ownership to move quickly. Meta removed 8,000 employees in April this year, representing about 10% of its workforce. Block, the payments firm, cut nearly half its staff in February, citing AI directly. Coinbase last week removed 700 employees and declared it would have no more "pure managers", capping its entire management structure at five layers below the CEO.
This is not a financial distress story. Microsoft reported revenue of over $70 billion in the first quarter of 2025, a 13% increase from the year before, and simultaneously cut more than 15,000 jobs. These companies are growing and laying people off at the same time. The logic is that AI tools are allowing the remaining staff to produce more output per person, so the headcount that was needed before is now an overhead cost.
The honest version of what is happening is more complicated than the press releases suggest. An analyst at Mizuho Securities said plainly that Coinbase's crypto downturn is "probably the real reason for most of the cuts" and that AI is likely an "easy excuse." That assessment applies more broadly. Companies are bundling workforce reductions they would have made anyway with an AI narrative that sounds forward-thinking rather than purely cost-driven.
But the broader trend is real regardless of how individual announcements are framed. The number of managers dropped over 6% between 2022 and 2025, according to data from Live Data Technologies. In a Korn Ferry survey of 15,000 professionals worldwide, 41% said their companies had already reduced management layers. Gartner's forecast puts one in five organisations globally on a path to cutting more than half of remaining manager roles by the end of this year.
What is being underestimated is the structural damage this causes to everyone below the manager tier. In a survey of 1,000 non-managerial employees, 86% said they rely on their manager to understand what company changes mean for their own role. Half said they go to their manager for professional development. When that layer is gone, senior leadership does not fill the gap. Nearly 40% of workers in the same study said senior leaders do not provide mentorship or career guidance at all.
For anyone earlier in their career, this matters enormously. The traditional path from junior contributor to senior leader runs through middle management. When those roles disappear faster than they are created, the ladder is not just harder to climb. In many cases it is being pulled up entirely. Younger workers in particular are entering what economists now call a low-hire market, where companies are not replacing roles they cut.
The spread beyond tech is already underway. Citigroup plans to reduce headcount by around 20,000, with automation handling middle-office functions. Accenture cut 11,000 roles. Paycom eliminated 500 back-office jobs after automating payroll. These are finance, consulting, and HR firms, not software companies.
Coinbase's model offers the clearest preview of where this is heading. Under their new structure, every leader must also be an active individual contributor. Small teams, sometimes even a single person, will handle engineering, product design, and delivery simultaneously using AI tools to cover the gaps. The company calls these "AI-native pods." In plain terms, it is one person doing what used to take a team of five or six, with AI handling the coordination work that managers used to do.
The companies that handle this well will be the ones that do not simply remove layers but actively rebuild how direction, feedback, and career progression work without them. The ones that do it badly will find themselves with lower costs in the short term and a serious internal knowledge and morale problem within 18 months. Research consistently shows that companies with effective managers produce better results, and that cutting too deep creates execution gaps that only become visible later, when the problems are already expensive to fix.