AI agents are upending the company org chart

• AI is coming for the middle managers — again.
• As companies explore the use of AI agents, consulting firms are exploring how agents are managed.
• IBM's senior VP said human managers won't manage agents "in the same way as we manage people."

Every few years, corporate executives call for a "Great Flattening," arguing that their organizations have grown sluggish from the weight of over management, duplicate roles, and bureaucracy.

Back in 2023, Meta CEO Mark Zuckerberg coined one of the tech industry's favorite tongue twisters when he said at a company Q&A session that he didn't want to see a management structure governed by "managers managing managers, managing managers, managing managers, managing the people who are doing the work."

That year he cut 10,000 workers from the company's ranks. Other companies followed suit. Later that year, Citi announced plans to cut its 13 layers of management to 8. By January 2024, UPS had begun eliminating 12,000 of its 85,000 managers.

Now, as AI unleashes waves of digital agents into the workforce, consulting firms are predicting a new wave of delayering and organizational change.

"Your org chart is probably going to start condensing into becoming more flat horizontally," Eno Reyes, the chief technology officer and cofounder of Factory, told Business Insider.

Factory is an AI-native software development platform that builds and deploys autonomous coding agents for consulting firms like EY and companies like Nvidia and Adobe.

Reyes said he's seen how the advances in AI can equip a single person with the capacity to manage more human teams because basic job functions like reporting and data can be automated.

"I think that breaks the middle management hierarchy," he said.

And as companies embrace teams in which digital and human workers co-exist, Reyes believes management structures will only become more streamlined. AI-focused groups inside companies are already "looking very flat compared to maybe the rest of the company," he said.

IBM Consulting expects different management structures to emerge as it embeds "digital workers" alongside its 150,000 human consultants, Mohamad Ali, the division's senior vice president, told Business Insider. IBM says it has built thousands of agents now deployed across nearly 300 client projects.

"I don't think human managers are going to manage these things in the same way as we manage people," Ali said. "There'll be systems to manage these things. There'll be systems to set up the guardrails."

Management hierarchies may not collapse immediately, but the expectation that they'll stay the same is fading, Arvind Vasudevan, a former McKinsey & Company engagement manager, told Business Insider.

"This current model of an engagement manager plus three business analysts and associates — which creates the lower part of the pyramid — doesn't need to exist," he said, referring to a classic consulting project structure.

Instead, he envisions leaner consulting teams led by experienced generalists, supported not by layers of junior analysts, but by technical specialists who build and refine agents that can be deployed across multiple projects.

McKinsey is already on the search for candidates who can work double duty. Alex Singla, a senior partner at McKinsey who co-leads its AI arm QuantumBlack, told Business Insider in December that the firm is looking for "5Xers" who are deeply skilled in one area, but can manage three or four different things well.

Vasudevan, now the cofounder of Plaido, a startup that he described as "building a consulting team in a box," thinks that the next era of work goes beyond an agile group of workers. Instead, it will shift toward "megamanagers" — individuals managing larger teams and broader scopes of responsibility than before.

"You're going to have teams which are manager-heavy — where everybody is a manager, sometimes manager of humans, but always manager of agents."

Something to share about how consultants are using AI? Business Insider would like to hear from you. Email Lakshmi Varanasi at lvaranasi@businessinsider.com or contact her on Signal at lvaranasi.70.