What Is Happening to Middle Managers and Why It Matters More Than You Think?

Middle managers are having a bad decade. They are being laid off in waves, burned out at record rates, and increasingly opted out of by the generation that was supposed to replace them. The organizations doing the cutting believe they are becoming leaner. Many are actually becoming more fragile.

What the Data Shows

Middle managers made up one-third of all layoffs in 2023, according to a Bloomberg and Live Data Technologies analysis. In 2025, 41 percent of employees reported that their companies had trimmed management layers, based on Korn Ferry's Workforce 2025: Power Shifts report, which surveyed 15,000 professionals worldwide.

The rationale behind most of these cuts follows a similar logic: AI and improved communication tools reduce the coordination burden, flattening the organization should speed decisions, and fewer management layers mean lower costs. Gartner's October 2024 research projected that one in five businesses would use AI to flatten their organizational structures, slashing over half of current middle management positions.

The problem is that the logic is incomplete. Coordination was never the primary value middle managers provided. Their real function: coaching, context-translation between strategy and execution, and developing the next layer of leadership is not captured in any cost-reduction model.

What Gets Lost When You Cut the Middle

The coordination duties previously handled by middle managers have not disappeared. Some responsibilities have shifted to already overloaded senior executives. Other tasks have ceased altogether. A less visible loss is the ongoing coaching these managers provided, leaving high-potential staff without guidance on complex decisions or how to navigate the organization. This daily interaction represented a form of real-time leadership development distinct from formal training programs.

Deloitte's 2025 Global Human Capital Trends research found that a manager's ability to lead, inspire, and engage the workforce is one of the largest influencers in maintaining a productive workforce. The most effective development and motivation happen at a one-on-one level between managers and their people. Effectively developing direct reports can boost their performance by as much as 27 percent and make them 1.5 times more likely to exceed their goals.

This is the accounting error in most delayering decisions: the cost of removing a middle manager is visible and immediate. The cost of losing that manager's coaching, institutional knowledge, and team cohesion function accumulates slowly and shows up elsewhere in higher turnover, slower development of high-potential employees, and senior executives spending time on problems that should never reach their desk.

The Pressure From Below Is Just as Serious

The supply problem is compounding the structural one. According to a recent Robert Walters survey, approximately 75 percent of Gen Z professionals prefer advancing as individual contributors rather than pursuing management roles. Even among those who anticipate becoming managers, over one-third express reluctance about the prospect.

This is not simply a generational preference. It is a rational response to what they observe. Nearly half of middle managers surveyed in a UKG report said they were likely to quit within a year due to job stress. Glassdoor data shows manager sentiment fell to its worst-ever levels, a trend exacerbated by layoffs and increasing workloads.

The pipeline into middle management is thinning precisely when organizations have made the role harder and less supported. The result is a compounding leadership deficit that will take years to reverse.

What the Best Organizations Are Doing Differently

The companies that are navigating this well are not simply keeping all middle management layers intact. They are being deliberate about which management roles create genuine organizational value and redesigning those roles to be sustainable.

DDI's Global Leadership Forecast 2025 found that leaders identified "setting strategy" and "managing change" as their two greatest skill gaps. Only 22 percent of HR teams said they prioritize developing these skills.This gap matters because the middle managers who survive organizational pressure are the ones who can operate as connectors: translating ambiguous strategy into concrete action, maintaining team trust through uncertainty, and building the capabilities of the people under them.

Organizations that respond to middle manager pressure with one-time training, wellness perks, or instructions to "just use AI" without genuine structural support are treating symptoms rather than causes.The interventions that work are more fundamental: reducing administrative load through real tool adoption, involving managers in decisions rather than asking them to implement decisions made without them, and creating enough psychological safety for managers to signal problems early rather than absorbing them silently.

The Implication for Senior Hiring

The middle manager crisis has a direct consequence for executive hiring that most organizations have not yet priced in. When the coaching and development layer is removed or depleted, the pipeline of candidates ready for senior leadership appointments thins. Organizations that have cut aggressively at the middle are now finding that their succession bench is shallower than expected and that external hiring at the Director and VP level is the result.

This is not an argument against organizational efficiency. It is an argument for measuring the right things. The cost of developing a high-potential manager into a Director-ready leader is a fraction of the cost of an external executive search conducted because no internal candidate was ready.

For organizations assessing their leadership pipeline or navigating senior hiring because internal succession has not kept pace, AlvaHunt works exclusively at the executive level across Indonesia.