AI adoption prompting companies to become flatter

About 8,000 Meta employees lost their jobs this week. The company is looking to offset its massive spending on AI and “operate with a flatter structure … that can move faster,” according to an internal memo. Flatness has become a common refrain when tech companies cut jobs.

It’s hard to coordinate between all the different parts of a growing company. That’s where middle managers come in, according to Tristan Botelho, an associate professor of organizational behavior at Yale School of Management.

“The classic job is getting 12 different status updates from four different departments, and trying to understand it in one summary,” he said.

And that’s something AI can do pretty well. “Any executive can say, ‘Give me a status update from what you're seeing at the team level: 2 a.m., 4 a.m., 7 a.m., 2 p.m.,’ it doesn't matter.”

Tech companies are eager to cut expenses and red tape, said Emily Rose McRae, senior director analyst at Gartner.

“If you have more layers of responsibility and more levels of sign-off than really allow you to be effective, if that's one of the major barriers; it could make sense to reduce that,” she said.

But there are limits to how well AI can replicate human managers, she said, and companies could be overloading those who remain. Large teams of 25 or more have become more common as companies collapse their org charts, per Jim Harter, Gallup’s chief scientist of workplace management and wellbeing.

“If they treat it more as a transaction than as kind of a transformational way to upgrade the way that they manage people, then it can fail,” he said.

Harter added that employee engagement has dropped to a ten-year low — and manager relationships have a lot to do with that.