The fight over return to office hides a blunter pressure point. Manager engagement is sliding, job postings for middle managers are drying up, and forecasts say AI will flatten hierarchies further. The risk is obvious: cut a layer, then discover that coordination, coaching, and judgment did not disappear with the title.
The layer is thinning, by the numbers
Gallup reports global employee engagement fell to 20 percent in 2025, the lowest since 2020, with an estimated cost of about 10 trillion dollars in lost productivity, or 9 percent of global GDP (Gallup, 2025). Managers themselves are disengaging fast. Their engagement dropped from 27 to 22 percent between 2024 and 2025, a nine-point slide since 2022. The same report shows what good looks like. In best-practice organizations, 79 percent of managers are engaged, almost four times the global average, a reminder that engagement is designable, not a law of nature (Gallup, 2025).
Market signals point in the same direction. Deloitte notes that U.S. employers were posting 42 percent fewer middle-management openings at the end of 2024 compared with spring 2022 (Deloitte, 2025). The firm also cites a Gartner forecast that by 2026, 20 percent of organizations will use AI to flatten their structures (Deloitte, 2025). Fortune, summarizing the same Gartner outlook, adds that the forecasted flattening would eliminate more than half of middle-management roles in those firms, a scenario to treat as projection, not outcome (Fortune, 2025).
Complexity is the other shove. In a 2023 survey of more than 2,500 business leaders, McKinsey found that only half said their organizations were well prepared to anticipate and react to shocks, and two-thirds saw their organizations as overly complex and inefficient (McKinsey, 2023). If leaders believe their firms are too complicated to adapt, fewer layers and clearer accountability will remain on the table.
What to cut, what to keep
Before firms lop off rungs, they should ask what their managers actually do. Deloitte’s 2025 research finds managers spend almost 40 percent of their time on firefighting and administrative work, only 13 percent on developing people, and more than a third feel unprepared for the people side of the job (Deloitte, 2025). That mix is upside down. Administrative coordination is the first candidate for automation and standardization. Coaching, context setting, and judgment are not.
This is an argument for redesigning roles rather than defending titles. Use technology to strip reporting cycles, status collation, and routine approvals from the critical path. Then concentrate the remaining management work where it creates value: clarifying priorities, growing capability, and resolving cross-team interdependencies. The Gallup spread between average and best-practice manager engagement suggests that this is a solvable design problem, not a fixed trait of the workforce (Gallup, 2025). The interpretive leap is straightforward. If the job becomes less clerical and more developmental, and if those asked to do it are equipped to coach, fewer managers can do more useful managing.
A proof of possibility: thousands without a middle layer
Skeptics ask whether large organizations can run without a middle layer at all. One European case shows it is possible under strict conditions. Buurtzorg, a Dutch home-care provider, scaled to more than 900 self-managing teams with about 14,700 employees as of January 2021, and operates with only two directors, roughly 50 people in the back office, and no middle managers or supervisors (Martela and Nandram, 2025). The company supports around 950 teams with just 21 internal coaches, or more than 45 teams per coach, and those coaches have no formal authority and no responsibility for team productivity (Martela and Nandram, 2025).
Historical cost data made the model famous, though it should be read with care. A KPMG analysis around 2015 reported Buurtzorg’s overhead at 8 percent compared with a sector average of 25 percent in Dutch home care, a dated comparison that should not be used in the present tense. The same peer-reviewed case also notes Buurtzorg’s hourly cost was higher than peers (€54.47 versus €48.74), a reminder that savings from a thin staff structure do not necessarily mean lower unit costs (Martela and Nandram, 2025). The authors identify boundary conditions: the model works best where inter-team interdependence is low, frontline professionals are highly motivated and competent, and services are supported by strong standards and information systems (Martela and Nandram, 2025). In other words, the context does a lot of the coordinating.
Avoid the ideology trap
The last decade’s debate about self-management tilted between evangelism and scorn. Harvard Business Review’s assessment of holacracy and related models argued for a middle path. In 2016, Zappos was the largest company to adopt holacracy in full, and the authors urged a sober reading of what these systems promise and where they strain (Bernstein, Bunch, Canner and Lee, 2016). The lesson endures. Treat flatter designs as tools in a kit, not beliefs to profess. What matters is the fit between work and structure, not the purity of the model. The 2016 vantage point is a caveat, but the warning against polarization still helps leaders avoid false choices.
The practical read
Three moves follow from the evidence. First, thin or remove managerial work that looks like traffic control and forms processing. Given how much time managers now spend on administration, there is slack to recover (Deloitte, 2025). Second, concentrate remaining management on a smaller cadre whose remit is people development and cross-team problem solving. The gap between average and best-practice manager engagement suggests there is room to design for this outcome (Gallup, 2025). Third, be selective about where to flatten completely. Buurtzorg shows a credible path at scale, but the boundary conditions are real, and not every business meets them (Martela and Nandram, 2025).
Flattening will not spare leaders the work of management. It will move it. Titles may go, but decisions, standards, and stewardship do not. The organizations that come out ahead will cut a layer and keep the management.
Sources
- Gallup (2025). State of the Global Workplace 2025. Reports global engagement at 20 percent, a 10 trillion dollar productivity cost, a sharp drop in manager engagement, and a 79 percent manager engagement rate in best-practice organizations, grounding the case that engagement is a design choice. https://www.gallup.com/workplace/659610/state-global-workplace.aspx
- Deloitte (2025). 2025 Global Human Capital Trends. Finds managers spend nearly 40 percent on administration and only 13 percent on people development, 36 percent feel unprepared, notes a 42 percent drop in U.S. middle-management postings since 2022, and cites a Gartner forecast that 20 percent of organizations will use AI to flatten by 2026. https://www.deloitte.com/us/en/insights/topics/talent/human-capital-trends/2025.html
- Fortune (2025). Surviving the great flattening: the coming extinction of the middle manager. An opinion essay that relays Gartner’s forecast that by end-2026, 20 percent of organizations will use AI to flatten their structures, eliminating more than half of middle-management roles in those firms, which is a projection to treat as forecast. https://fortune.com/2025/09/19/surviving-great-flattening-coming-extinction-of-middle-manager-layoffs/
- Martela and Nandram (2025). Buurtzorg: scaling up an organization with hundreds of self-managing teams but no middle managers, Journal of Organization Design. A peer-reviewed case showing 900-plus self-managing teams and about 14,700 employees (Jan 2021) with no middle managers, supported by coaches without authority, plus boundary conditions and cost caveats. https://link.springer.com/article/10.1007/s41469-024-00184-y
- Bernstein, Bunch, Canner and Lee (2016). Beyond the Holacracy Hype, Harvard Business Review. Argues for a balanced view of self-management and notes that Zappos was, in 2016, the largest full holacracy implementation, cautioning against polarized takes. https://hbr.org/2016/07/beyond-the-holacracy-hype
- McKinsey (2023). The State of Organizations 2023. Finds only half of leaders say their organizations are prepared for shocks and two-thirds see excessive complexity and inefficiency, framing the demand for simpler structures. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-state-of-organizations-2023