Questions this post answers
- Which of these manager seats are coordination — and which are apprenticeship?
- If I flatten to fund AI, where does my next CEO come from?
- Am I calling cost-cutting “modernization”?
Gartner made a prediction in late 2024 that reads differently now that we’re living inside its window: through 2026, 20% of organizations will use AI to flatten their organizational structures and eliminate more than half of current middle-management positions.
If you’re in that 20%, you already know it. The business case is clear. The layer is expensive, slows things down, and a fair amount of what it does — routing, status, approvals, the weekly roll-up — software does now.
But not every manager’s seat is the same. Some of those seats are simple coordination and cutting them breaks nothing.
Other seats are development roles. Someone carries a P&L for the first time. Or they fire someone and learn what it actually costs them. In these roles, they stand in front of a room and defend a bad quarter. Nobody learns those things as an individual contributor, and nobody learns them from a weeklong executive training course.
Those seats are where your next CEO gets built. They’re also, on a spreadsheet, indistinguishable from the coordination layer.
Two numbers worth holding next to the Gartner one.
The first, Gallup — drawing on two decades of data from more than 2.5 million work units — found that managers account for at least 70% of the variance in employee engagement scores across business units. That finding is from 2015, which is rather the point: it predates the AI argument entirely. The layer you’re thinning is where the difference between your strong and weak units lies.
The second, a 2026 Deloitte survey, finds that only 6% of Gen Z and millennials say achieving a leadership position is their primary career goal. That reads like nobody wants the job. But the same survey finds that 76% of Gen Z do want a senior role at some point. They aren’t refusing the climb — they’re deferring it until they’ve got the experience to lead. Cut the seats and nobody gets it.
Replacing a middle layer with AI is not a trivial exercise. A flattening decision that would withstand a peer’s questioning sounds like: these six seats are coordination, here’s what absorbs the work, and here are the four we’re protecting because that’s where two of our next general managers learn to run something. A decision that wouldn’t withstand it sounds like: we’re modernizing.
Are you calling cost-cutting a modernization because the savings land this year and the hole doesn’t show up for ten?
That’s not a question to answer alone at your desk. It’s a question for a table of CEOs with no stake in your comfort — which is what a peer advisory group is for. They’ll ask which seats and why.
Sources
Gartner, “Top Predictions for IT Organizations and Users in 2025 and Beyond,” October 22, 2024: “Through 2026, 20% of organizations will use AI to flatten their organizational structure, eliminating more than half of current middle management positions.”
Gallup, State of the American Manager: Analytics and Advice for Leaders, April 21, 2015: “Managers account for at least 70% of the variance in employee engagement scores across business units.” Based on 27 million employees across more than 2.5 million work units. This is a between-team variance partition — it says differences in engagement between business units track to the manager.
Deloitte Global Gen Z and Millennial Survey 2026, published May 13, 2026 (fieldwork November 24, 2025 – January 15, 2026; n = 22,595): “only 6% of Gen Zs and millennials say achieving a leadership position is their primary career goal.” The same release reports that 76% of Gen Z are interested in a senior leadership role at some point, which Deloitte frames as delayed rather than absent ambition.