The “pure manager” layoffs: how AI is reshaping middle management
Tech Twitter’s been stewing over how AI may reshape middle management.
Coinbase CEO Brian Armstrong, in his viral post announcing a 14% workforce reduction at the crypto exchange, announced the company would no longer have “pure managers.”
“Every leader at Coinbase must also be a strong and active individual contributor,” Armstrong wrote. “Managers should be like player-coaches.”
Armstrong isn’t the only, or first one, favoring this mindset. After Block cut roughly 40% of its staff in February, CEO Jack Dorsey espoused the player-coach shift. Other tech leaders, including Snap's Evan Spiegel, are also reimagining their orgs, doubling down on “small squads” to use AI more efficiently.
The discourse is heating up as companies cite AI in reorg decisions: total corporate layoffs are actually down 10% this year, according to Challenger, Gray & Christmas, but tech layoffs are up 33%. Last week alone, Cloudflare and PayPal both announced mass layoffs linked to AI.
Whether tech layoffs are a direct result of AI advancements or merely a convenient excuse, it’s true that the management layer has already been shrinking for years.
- Middle managers made up one-third of all layoffs in 2023, according to a Bloomberg and Live Data Technologies analysis.
- And last year, 41% of professionals in a Korn Ferry survey said their company had cut roles at the manager level.
But there’s a flip side to the elimination of the managerial layer. Korn Ferry’s 2025 survey found that the lack of managers left 37% of respondents feeling directionless, while 43% said their leaders lacked alignment. The management shrinkage is also creating a growing class of “megamanagers,” leaders with a greater number of direct reports.
According to Gallup, the average number of people reporting to managers climbed from 10.9 in 2024 to 12.1 last year. The downsides: megamanagers may find themselves firefighting rather than focusing on the big picture or developing talent.
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