Companies may cut managers to save costs, risking employee engagement
Companies are using AI to reduce administrative work for managers, allowing them to oversee larger teams—up to 12 members on average in the U.S., up from 8.2 in 2013. The shift, called the ‘megamanager’ trend, aims to cut costs by automating routine tasks like reporting and status updates. However, Gallup data shows managers account for 82% of employee engagement variance, a critical factor in…
Key points
- Companies are using AI to reduce manager workloads, increasing team sizes from 8.2 to 12 members on average
- Gallup reports managers drive 82% of employee engagement, yet only 31% of U.S. workers are actively engaged
- Stretching managers risks higher turnover costs (up to $45,236 per employee) and undermines AI-driven productivity gains
Experts warn that stretching managers thinner may backfire. A 2023 CMB study found only 1 in 10 people possess the innate talent for effective management. Stretching managers across more employees reduces time for coaching, feedback, and relationship-building, risking higher turnover costs—up to 200% of an employee’s annual salary. Platforms like Cloverleaf and MODO argue AI should augment managers, not replace them, by automating data-heavy tasks while preserving human judgment and team connection.
Companies Are Using AI to Cut Managers. They May Be Eliminating the Layer That Makes AI Pay Off
Unite.AI · 28 September 2026
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