Why TCS, Amazon and others are thinning the middle layer? Red flags for managers to watch out for

Picture this: On a Tuesday morning in Bengaluru, a programme manager opens a routine email and realises it is anything but: her team doubles overnight, weekly updates are auto-generated, and a colleague in a similar role has been moved to a “bench” with two weeks to find a new project. Versions of this scene are spreading across tech. TCS has announced a 2% workforce reduction—more than 12,000 roles for FY26—with the impact concentrated in mid- and senior bands. Google , in its own drive for efficiency, told staff it has cut managers of very small teams by 35% over the past year, suggest media reports. Wipro moved first. In January 2024, it shed hundreds of mid-level onsite roles to shore up margins. Amazon was blunter: By memo, divisions were told to lift the individual-contributor-to-manager ratio by at least 15% by end-Q1 2025.
Strip away the press statements and the pattern is clear: Companies want faster decisions, lower cost, and measurable outcomes. In that world, roles focused mainly on supervision, reporting, or hand-offs are the first to be questioned.

Mid-level risk checklist
Gartner, a research and consulting firm that assists businesses to utilise technology to enhance their performance, estimates that by 2026, in roughly 20% of companies, AI will replace about half of middle-management roles. If you want to gauge your risk, watch for:

• Span and layer redesigns: Sudden memos widening the number of direct reports per manager.
• Bench policy tightening: Shorter redeployment windows; pressure to find internal moves quickly.
• Deal language: New contracts promising fixed productivity gains without proportional hiring.
• Budget allocations: Budgets are moving from people doing checks by hand to software and engineering practices that automate, measure, and fix things faster.
• Performance metrics: You are not rewarded for how many people you oversee. You are appreciated for what customers actually feel.
• Market signals: Fewer pure “programme manager” postings, more hybrid roles that mix technical contribution with coordination.

The squeeze in the middle: Speed, software, and the new maths of management
What held the mid-layer together was coordination cost. When updates needed meetings, when risk lived in spreadsheets, when clients demanded one throat to choke, you needed a relay of supervisors to move work along. That world is disappearing. AI now drafts status notes, summarises hour-long calls into five action points, and flags slippage before a human escalates it. Coordination has become cheap; layers become expensive.

The second driver is margin discipline. The post-pandemic hiring binge created rungs for retention rather than necessity. With growth normalising and investors insisting on operating leverage, CFOs are combing through ‘overhead’. In that sweep, roles whose output is hard to price—supervision, sign-offs, internal gatekeeping—struggle to justify themselves.

What erodes fastest are roles defined by hand-offs: Status reporting, cross-team shepherding without design or code authority, internal traffic control. If your week is mostly meetings, trackers, and escalations, software is encroaching on your job description.
Top skills for middle managers to stay relevant
The middle layer isn’t doomed—it’s being rewritten. The managers who endure are those who blend human judgement with technical literacy, turning coordination into contribution. In the new order, these skills stand out.

• Data fluency: Decisions are no longer defended with instinct but with dashboards. Managers who can read, question, and act on data—rather than merely receive it—become indispensable interpreters between analytics and action.
• Technical empathy: Middle managers do not need to code anymore. Instead, they need to understand how systems work, automation is built, and where it breaks. Knowing what your engineers or analysts mean when they say “latency,” “API,” or “pipeline” helps you shape timelines and remove friction credibly.
• Financial literacy: Margin discipline is now part of every conversation. Understanding cost structures, contract clauses, and productivity metrics helps managers align team goals with business reality. There is hardly any way to shield your people from the balance sheet anymore. Instead, help them read it.
• Clear, concise communication: With AI handling reports and updates, the human advantage lies in synthesis and persuasion. The best managers craft clarity: They connect dots across teams, explain trade-offs to clients, and translate goals into daily work without jargon or drama.

The bottom line
The future middle manager is not a messenger or monitor, but a translator—someone who turns complexity into clarity and strategy into execution. In an era where software measures performance, what remains distinctively human is judgement. Those who cultivate it will find that the middle still matters.