Discussions about AI and work tend to focus on what is most visible: customer service bots, automated reports and productivity gains. But behind the headlines, something less obvious, and arguably more consequential, is unfolding. Across industries, the middle layer of organisations is quietly being hollowed out.
Deloitte’s 2025 Global Human Capital Trends report highlights that one in five organisations are already using AI to flatten their hierarchies. In practice, that could mean up to half of the existing middle management roles may vanish over time. Many of the responsibilities previously assigned to managers, such as planning, prioritisation and people development, are now being distributed between technology and frontline teams.
What we’re seeing isn’t just a change in structure, but a shift in how leadership shows up day to day. Managers used to provide a critical link between strategy and execution. When that layer begins to disappear without an alternative plan, things start to unravel in unexpected ways.
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Where decisions used to be made
AI tools are increasingly stepping into spaces that once relied on human judgment. Task allocation, workload balancing, performance insights – these are no longer exclusively human domains. Many teams are already using AI to summarise meetings, distribute action points, monitor engagement and highlight bottlenecks. What once required a team lead is now being handled, or at least heavily guided, by automated systems.
In theory, that’s efficient. But in practice, it strips out the human context that often makes the difference between a good decision and a poor one. People don’t always follow the data. They have off-days, interpersonal tensions and motivations that aren’t captured in dashboards. Managers have traditionally been the ones to spot these subtleties and make adjustments. When that function is replaced by technology, what gets missed?
The quiet rise of informal leadership
Without clear role definitions or ownership of decision-making, teams start to look elsewhere for guidance. New forms of leadership emerge – not necessarily appointed, but assumed. These “shadow leaders” might be the person who best understands the AI tools or someone with enough tenure to steer the ship by default. Often, they take on responsibility without the authority, creating ambiguity about who’s accountable when things go wrong.
This muddiness creates friction and risks damaging culture. When there’s no clarity around roles, people stop raising issues. When there’s no manager to go to, individual frustrations fester. At a time when trust and communication are more important than ever, we’re seeing teams drift into uncertainty simply because the structure no longer supports human-led problem-solving.
Burnout doesn’t need to be loud
What happens when the middle tier of leadership is removed without adequate support? Far from creating a flatter, freer workplace, it often leads to people quietly shouldering more responsibility, with less guidance and little recognition. Senior leaders become stretched across too many direct reports. Frontline staff are left making decisions they were never trained for.
The result is a slow, steady erosion of morale. Where organisations mistake burnout for laziness or resistance to change, in reality, it’s because the system quietly asks more than it gives. To add, if the practical elements of management, such as reporting, scheduling, and tracking, are being handled by AI, where does that leave the people in charge?
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Thankfully, organisations are rethinking the answer to that question. Increasingly, we’re seeing companies move away from command and control as the core function of a manager. Instead, they’re emphasising coaching, facilitation and emotional intelligence.
The shift reflects a recognition that technology can’t totally replace the messy, human parts of work – the areas where relationships and trust are key.
Therefore, organisations should be investing in leadership development – not just for people with “manager” in their title, but for anyone expected to lead, support or develop others. This also means rethinking who those people are.
In many cases, individual contributors are stepping into more strategic roles without becoming formal managers. The distinction between managing and leading is becoming more fluid, and that’s not a bad thing, as long as the right support is in place.
A flatter future needs deeper leadership
There’s no denying that AI is transforming how we work. But while the structure may be getting flatter, leadership can’t be allowed to disappear. Someone still needs to make the call, navigate the grey areas and help others find their place within a changing environment.
If we want to create resilient, adaptive teams, we need to move beyond the binary of "keep the managers" or "cut the fat." Instead of striving to remove middle management due to costs or efficiency, organisations should think about how to reimagine it. That means designing roles that support human development, not just technical coordination. It also means recognising that culture, clarity and connection don’t happen by accident. They happen when someone takes responsibility for making them real.
That someone may not always look like a traditional manager. But if we leave the role empty, the cost will be paid in confusion, fatigue and missed potential - quietly and over time.
Ross Garner is chief learning officer for Mindtools
