August 7, 2025
5 min read
Beatrice Nolan
AI is transforming corporate structures by flattening hierarchies, redefining roles, and creating new C-suite positions.
AI isn't just a new tool for the modern workplace; it's quietly reshaping how companies are organized.
AI is quietly changing the traditional corporate hierarchy, flattening structures and reshaping job roles from the bottom up. Companies like Amazon, Moderna, and McKinsey are eliminating layers of middle management, merging departments, and deploying AI agents to automate routine work. As AI automates various tasks, even the C-suite is changing, with new AI leadership roles emerging and long-held power dynamics shifting.
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.
At Moderna, HR and tech now live under the same roof overseen by one Chief People and Digital Officer. At another AI-first healthcare company, a team of 10 software engineers has been replaced with a 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.
Call it “the Great Flattening.”
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.
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’s Satya Nadella put it earlier this year: “I think with AI and work with my colleagues.”
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?
Originally published at Fortune on August 7, 2025.
An AI Flattening
One key theme of organizations pivoting to “AI-first” structures is a kind of “flattening” 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 once performed by human employees. It can also mean the collapse or conflation of traditional team structures. For example, pharmaceutical company Moderna 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’s partnership with OpenAI and its leaning into AI to help handle HR support and some junior roles. 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. Around 40% of the company’s revenue now comes from advising on AI and related technologies. “If you’re an AI-first organization, you can use these AI agents to essentially do a lot of the execution work of organizations,” Nick South, managing director and senior partner of Boston Consulting Group, told Fortune. “And when we organize our processes and our delivery processes around this AI native workforce, the role of the humans, then, is different.” This is partly because the nature of individual job roles will change as tasks get automated by AI tools or agents. “Our 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,” Eva Selenko, professor of work psychology at Loughborough Business School, said. “You might need less of the one role, but that person will take over another function from another thing.” This doesn’t mean entire jobs will be replaced, but employees’ roles could become more diverse and take on tasks outside their normal scope or 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. Mix all this with a few AI agents carrying out autonomous work, and the traditional org chart starts to look dramatically different. “Now we’re moving to this more flat network of human teams supervising AI agents,” Rob Levin, partner at McKinsey & Company, said. “In early examples, we’re seeing that a client company building an agent factory supporting multiple business workflows can have about 50 to 100 AI agents managed by just two or three people,” he said. In one example, Levin said a healthcare company 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’s broader tech ecosystem. However, these major structural changes are easier to implement in smaller organizations or startups rather than in larger companies with more complicated structures.The Plight of the Middle Manager
One way companies, especially in tech, have simplified and flattened their structures for the AI age is by cutting employees at the managerial level. Palantir CEO Alex Karp announced plans to cut 500 roles from his 4,100-person staff, calling it a “crazy, efficient revolution.” Middle managers have taken flak from Big Tech CEOs like Andy Jassy, who said middle managers can hinder speed, ownership, and innovation at Amazon, especially amid AI-driven change. Jassy is pursuing a flatter structure at Amazon by increasing the ratio of individual contributors to managers, aiming to remove layers and streamline decision-making. However, experts told Fortune that middle managers shouldn’t be counted out yet. “One obvious possibility [of flatter organizations] is some managerial thinning,” said Tristan L. Botelho, associate professor of organizational behavior at Yale School of Management. “If AI reduces coordination burden, it could shrink middle management’s role, whose job was to make these connections.” But Botelho does not expect middle managers to disappear completely. “I don’t think middle management is going to be erased. It’s going to redefine how managers think about their role,” he said. “AI integrated with the organization should level up your skill set as a manager.” In the AI age, soft skills become increasingly important, with middle managers serving vital HR functions. Employees still need management, and organizations risk losing top performers without empathy. “There is a human side of things,” Stella Pachidi, Senior Lecturer in Technology and Work at King’s Business School, said. “It’s not sustainable to just have a boss as an algorithm; it won’t work long term.” Contrary to Big Tech’s narrative, some experts say the managerial class may expand within traditional structures as automation replaces low-level work. BCG’s Nick South told Fortune that execution-level jobs, typically at the bottom of the org chart, will be first cut by AI agents, while the managerial or “orchestration” level will grow in complexity and importance. “At the orchestration layer, that will need to be bigger than it is today… there’ll be a critical human part about making sure all this stuff is doing things,” he said. “Classic middle managers will need a combination of AI proficiency to manage a human-agentic workforce, plus skills in logic, ethics, rhetoric, and communication to work in less siloed organizations,” South said. “Those orchestration roles will be quite complex.”The New C-Suite
While middle managers and entry-level employees may feel the brunt of AI’s impact, changes reach the top as well. AI is shifting power dynamics in the C-suite and creating new executive roles. According to a 2023 Foundry study on AI, 11% of mid- to large-sized companies have appointed a “Chief AI Officer” (CAIO), while 21% are recruiting for the role. LinkedIn’s 2023 report on AI at work showed companies with a “Head of AI” position tripled in five years, growing 13% from 2022. Alex Connock, senior fellow at Oxford’s Said Business School, has witnessed the rise of these roles. “While rare a few years ago, now many executive course attendees hold the title Chief AI Officer,” he told Fortune. “It’s the new mainstream, with interest from 20-year-old undergrads to seasoned executives.” Though some debate these roles’ longevity and authority, the executive level is not immune to AI’s boom. South said the rise of such roles may reflect immaturity with AI rather than direct need, but the C-suite must take on new responsibilities. “People feel nervous about missing the boat,” he said. “It will be interesting to see how this evolves… how different it will be from the classic chief data officer.” “There is a new responsibility in the C-suite to think strategically about competitive landscape, disruption, and protecting advantage. Hiring a chief AI officer doesn’t mean leaving it to them alone. This is a top-level strategic issue.” While AI disrupts all levels, Selenko noted management structures likely protect those at the top from too much turmoil. “If those at the top’s job might be partly doable by AI, they won’t give up that power. So shifts in power balance will likely be among less powerful positions,” she said.Originally published at Fortune on August 7, 2025.