As artificial intelligence takes over, companies are now evaluating whether multiple layers of management are necessary in an AI-enhanced workplace.
Google, for instance, recently cut 35 per cent of its small-team managers, while Microsoft is signaling a similar approach, suggesting that AI could transform how work is assigned and monitored, as per a report by India Today.
In a recent episode of Lenny’s Podcast, Asha Sharma, corporate vice president for Microsoft’s AI platform, explained how AI agents could change organizational structures.
“At the end of the day, when you have a set of capable agents and people are capable of more things, you’re not going to start to think in hierarchy and communicating upward. You’re going to start to figure out outward, task-based type of opportunities,” Sharma said.
She described how AI could create a “work chart” that routes tasks automatically to the right human-AI combination, making rigid reporting lines less relevant.
The evolution isn’t limited to organisational processes. Sharma predicted that employees might soon bring personal AI agent stacks into the workplace, much like they bring laptops or phones today.
Tech giants embrace AI-led efficiency
Sharma’s insights come amid Microsoft’s ongoing restructuring. In May 2025, the company laid off roughly 6,000 employees, a move partly aimed at increasing managers’ span of control, reducing unnecessary layers, and improving decision-making speed.
Hiring has also slowed in non-critical areas, while resources are shifting toward cloud infrastructure and generative AI products, added India Today.
Other tech giants are pursuing similar strategies. Amazon CEO Andy Jassy has emphasised operating more like a “startup,” stripping away management layers to accelerate decisions.
Google has also restructured, reducing vice president and manager roles and offering voluntary exit programs and buyouts across departments. Sundar Pichai told employees the company must scale efficiently “without solving everything through headcount.”