The traditional corporate org chart, a neat triangle of power with executives at the top and junior workers at the base, is undergoing a quiet revolution, thanks to AI.<\/p>\n
At Moderna, HR and tech now live under the same roof overseen by one Chief People and Digital Officer. At another one AI-first healthcare company, a team of 10 software engineers have been replaced with three person unit overseeing AI agents. At Amazon, layers of middle management are being stripped out as part of a broader push toward a leaner, AI-ready structure.<\/p>\n
AI isn\u2019t just a new tool for the modern workplace; it\u2019s quietly reshaping how companies are organized.<\/p>\n
Call it \u201cthe Great Flattening.\u201d<\/p>\n
As business leaders race to integrate AI across their operations, entry-level roles are disappearing, management layers are thinning, and traditional team roles are starting to blur. Across the Fortune 500, middle management is taking hits, as are entry-level workers, but even at the C-suite, new power dynamics are at play as the old pyramid structure of corporate life starts to flatten out.<\/p>\n
Tech bosses have been keen to promote a vision where AI automates the drudgery of work, cutting out admin while allowing soft skills and creativity to flourish. Or, as Microsoft\u2019s Satya Nadella put it earlier this year: \u201cI think with AI and work with my colleagues.\u201d<\/p>\n
While the utopian idea of a world without tasks like editing Excel spreadsheets or sorting through files sounds great in theory, what does an AI-first organization actually look like in practice?<\/p>\n
An AI flattening<\/p>\n
One key theme of organizations that are pivoting to \u201cAI-first\u201d structures is a kind of \u201cflattening\u201d of company structure, which essentially means fewer layers of management oversight, the removal of junior or support roles, and a growing reliance on AI systems to handle tasks that were once handled by human employees.<\/p>\n
It can also mean the collapse or conflation of traditional team structures.<\/p>\n
For example, pharmaceutical company Moderna<\/a> recently merged its technology and human resources departments into a single function, appointing a Chief People and Digital Technology Officer to oversee both teams. The move, according to the Wall Street Journal, was driven in part by the company\u2019s partnership with OpenAI and the company leaning into AI to help handle things like HR support and some junior roles.<\/p>\n At consulting giant McKinsey, the company is deploying thousands of AI agents to support consultants with tasks such as building decks, summarizing research, and verifying the logic of arguments. On top of this, around 40% of the company\u2019s revenue now comes from advising on AI and related technologies.<\/p>\n \u201cIf you\u2019re an AI-first organization, you can use these AI agents to essentially do a lot of the execution work of organizations,\u201d Nick South, the managing director and senior partner of Boston Consulting Group<\/a>, told Fortune. \u201cAnd when we organize our processes and our delivery processes around this AI native workforce, the role of the humans, then, is different.\u201d<\/p>\n This is partly because the nature of individual job roles will change as tasks get automated by AI tools or agents.<\/p>\n \u201cOur job roles get kind of deconstructed, because some tasks might be taken over by AI and others might be new, so the meaning, or the function of the job changes,\u201d Eva\u00a0Selenko, a professor of work psychology at Loughborough Business School, said. \u201cYou might need less of the one role, but that person will take over another function from another thing.\u201d<\/p>\n This doesn\u2019t mean that entire jobs will be replaced, but it could mean employees\u2019 roles become more diverse and take on tasks outside their normal scope of duties, or even their usual team. Job roles get deconstructed as tasks get automated, and their importance in the organization changes, Selenko said. As a result, strict divisions between teams may start to blur.<\/p>\n Mix all this in with a few AI agents carrying out autonomous work, and the traditional org chart starts to look dramatically different.\u00a0\u00a0<\/p>\n \u201cNow we\u2019re moving to this more flat network of human teams supervising AI agents,\u201d Rob Levin, a partner at McKinsey & Company, said.<\/p>\n \u201cIn early examples, we\u2019re seeing that a client company that\u2019s building an agent factory supporting multiple business workflows, about 50 to 100 AI agents can be managed by just two or three people,\u201d he said.<\/p>\n In one example, Levin said a healthcare company had replaced a traditional 10-person software development team with much smaller, three-person units. These consist of a product owner, a software engineer who can effectively prompt AI coding tools, and a systems architect who ensures integration with the company\u2019s broader tech ecosystem.<\/p>\n However, these kinds of major structural changes are easier to implement in smaller organizations or startups rather than in larger companies that have more complicated structures.<\/p>\n The plight of the middle manager<\/p>\n One of the ways companies, especially in the tech sector, have tried to simplify and flatten their structures for the AI age is to slash employees at the managerial level. Palantir CEO Alex Karp, for instance, announced on Monday\u2019s earnings call that he intended to cull 500 roles from his 4,100-person staff. he called it a \u201ccrazy, efficient revolution<\/a>.\u201d<\/p>\n Middle managers have especially taken a lot of flak, especially from the likes of Big Tech CEOs such as Andy Jassy, who has said that middle managers can hinder speed, ownership, and innovation at Amazon, particularly in the context of AI-driven organizational change.<\/p>\n Jassy is currently pursuing a flatter company structure at Amazon by increasing the ratio of individual contributors to managers, aiming to remove layers and streamline decision-making.<\/p>\n However, experts told Fortune organizations shouldn\u2019t be counting out middle managers just yet.<\/p>\n \u201cOne obvious possibility [of flatter organizations] is that it\u2019s going to cause some sort of managerial thinning,\u201d said Tristan L. Botelho, an associate professor of organizational behavior at Yale School of Management. \u201cIf AI is reducing the coordination burden, it could shrink the role of middle management, whose job it was previously to make these connections.\u201d<\/p>\n However, while AI might change how middle managers work, Botelho does not expect them to disappear completely.<\/p>\n \u201cI don\u2019t think middle management is going to be erased. I think it\u2019s going to just redefine how managers think about their role within the organization,\u201d he said. \u201cOne thing I often talk about a lot with executives\u2026is this kind of idea that AI integrated with the organization, should\u2026level up your skill set as a manager.\u201d<\/p>\n In the AI age, soft skills also become increasingly important, with middle managers serving vital HR functions. Employees still need to be managed, and a workforce still needs to function with empathy or organizations risk losing their best performers.<\/p>\n \u201cThere is a human side of things,\u201d Stella Pachidi, a\u00a0Senior Lecturer in Technology and Work at King\u2019s Business School, said. \u201cIt\u2019s not sustainable to just have a boss as an algorithm, it\u2019s not going to work in the longer term.\u201d<\/p>\n In contrast to the Big Tech narrative, some experts say the managerial class will expand within traditional organizational structures as automation replaces low-level work.<\/p>\n BCG\u2019s Nick South told Fortune that execution-level jobs, which are typically at the bottom of the org chart, will be the first on the chopping block due to AI agents, while the managerial or \u201corchestration\u201d level will grow in complexity and importance.<\/p>\n \u201cAt the orchestration layer, that will need to be bigger than it is today\u2026there\u2019ll be a critical human part of that, which is about making sure that all this stuff is doing things,\u201d he said.\u00a0\u00a0<\/p>\n \u201cIf you think about a classic middle manager profile, it\u2019s sort of a general manager skill set. But what these people are going to need in the future is a combination of sufficient AI proficiency to manage a human-agentic workforce, plus the core skills of logic, understanding of ethics, rhetoric, and communication skills, so that they can communicate with others in much less siloed organizations,\u201d he said. \u201cSo those orchestration roles are going to be quite complex.\u201d<\/p>\n The new C-suite<\/p>\n While middle managers and entry-level employees may be feeling the brunt of the AI burden, these changes go right to the top.<\/p>\n AI is already shifting the power dynamics in the C-suite and creating new, powerful, executive-level jobs. According to a 2023 Foundry study on AI <\/a>Priorities, 11% of mid- to large-sized companies have already appointed someone to serve as \u201cChief AI Officer\u201d (CAIO), while an additional 21% are currently in the process of recruiting for the role.<\/p>\n