Middle Managers Face AI Threat: Burnout, Layoffs, and Leadership Crisis

Pity the middle manager. Even before the emergence of AI, these jobs had increasingly become a one-way ticket to burnout and misery. Since 2013, the average number of direct reports has increased by almost 50% to twelve employees, according to Gallup. The same poll revealed that less than one-third of managers are engaged at work, while over a quarter are planning to leave their jobs.

Enter AI: The ever-changing chimera, swathed in hype, is now making life more complicated for managers. Executives are bewitched by AI’s promise of productivity. Rank-and-file employees oscillate between fear that AI will take their jobs and overusing it. Those sandwiched in between—the middle managers—are caught between corporate’s AI directive (or lack thereof) and the occasionally wild experimentation of their direct reports.

Tech Moguls Push AI to Eliminate Middle Management

Unsurprisingly, some tech moguls see AI as an opportunity to eliminate the bothersome costs associated with paying human beings. Meta and Microsoft recently made headlines with new announcements about workforce reductions to counter ballooning AI costs. This follows Shyam Sankar, CTO of Palantir, telling Fox News:

“AI can eliminate bureaucracy because we’ve built up all these layers… to concentrate power essentially in the hands of a few bureaucrats running organizations and away from the worker at the frontline.”

Block CEO Jack Dorsey appears to be on board with the idea. In the wake of laying off 40% of his workforce, he wrote a blog post arguing that AI will make middle managers obsolete. On Sequoia Capital’s Long Strange Trip podcast, he said he plans to eventually reduce management from five layers to two or three, with the eventual goal of getting rid of all of them to have all 6,000 employees report directly to him.

Let us pause for a moment to consider the notion of 6,000 employees reporting directly to a CEO. Not exactly a Sun Tzu maxim. To win World War II, Dwight Eisenhower depended on the effectiveness of an army of middle managers (sergeants and lieutenants, captains and colonels). Dorsey’s assertion is the kind of magical thinking that may inspire potential investors to reach for the checkbook, but that in practice makes about as much sense as reducing salary cap burdens in the NFL by eliminating offensive linemen.

The Challenges AI Presents to Middle Managers

Designing Your Own Layoff: Meta’s AI Experiment

Companies like Meta have offered major-league compensation packages to AI researchers they think will help them get the edge, while middle managers scramble to implement technologies that evolve more rapidly than projects can even be outlined. Ethan, an individual contributor on Meta’s product risk review team, describes utter chaos in 2025 as pressure to use an internal AI tool to handle risk reviews for products under development ramped up. (Ethan requested we only use his first name.)

“My department was restructured six times within six months… I had a new manager every 30 days. None of them knew what the end goal was,” he says. “We had two weeks of getting to know each other, and then… we were trying to understand what the