NVIDIA CEO Jensen Huang recently predicted (as reported in an article in Fortune, 09-01-25), a seismic shift in the workplace, highlighting that AI agents will soon take over critical HR and operational functions. This technological shift underscores the continued decline of middle management, as AI systems increasingly handle not just repetitive tasks but decision-making and people management functions as well.

While AI's expansion promises efficiency and scalability, it also presents risks. The middle management layer once held the workplace fabric knowledge, the deep, tacit understanding of team dynamics, informal collaboration patterns, and cultural nuances critical to productivity and innovation. AI, for all its capabilities, lacks this human-centered context, reducing decision-making to data points rather than lived experiences.

This led us to look at how the structure of organisations have transformed through the lens of Henry Mintzberg's Structures in 51 framework. Using this framework, we can analyse how these shifts have impacted organisational knowledge, decision-making, and the overall fabric of the workplace. Since the 1990s, the shrinking role of middle management and the rise of technology and automation have reshaped corporate hierarchies, often leaving the C-suite without crucial insights into day-to-day operations. This has significant implications for the design and configuration of the workplace.

Whilst Mintzberg's famous model focused on five key structural configurations, including machine bureaucracies and adhocracies, it is the five key components of organisational structure that we focus on here:

  1. Strategic apex: the top leadership of an organisation (C-suite).
  2. Middle line: middle management, linking the strategic apex to the operating core.
  3. Operating core: employees responsible for basic operational work.
  4. Technostructure: analysts, planners, and systems that standardise and automate processes.
  5. Support staff: departments like HR, IT, and Facilities Management (FM), which provide essential services but don't directly contribute to production.

Each of these elements has evolved over the decades, with the middle line, the layer of middle management, being the most significantly impacted. This shift has led to the gradual erosion of what we call workplace fabric knowledge. That is the deep, tacit understanding of how and where work is actually done. The decline of this knowledge has serious implications for decision-making, particularly in the context of the return to the office, post the pandemic.

The changing landscape of work, mapped onto Mintzberg's five components of organisational structure

The 1990s: the rise of lean management and flattening structures

In the 1990s, organisations began to embrace lean management philosophies, aiming to cut costs and improve efficiency by reducing bureaucratic layers. This often meant trimming down middle management, which had traditionally played a vital role in bridging the gap between executives and the operating core. As organisations flattened their structures, many middle managers were either let go or absorbed into other roles. In some ways this helped to shape the era of workplaces polarised between single executive offices and open plan for everyone else, plus lots of formal meeting spaces.

At the same time, the role of the technostructure — analysts, planners, and IT systems — began to expand. With the rise of early enterprise resource planning (ERP) systems and computer aided facilities management (CAFM), companies started automating standardised processes, moving away from human-driven decision-making and toward more data-driven models. The reduction in middle management left a knowledge gap, as these managers were often the keepers of tacit knowledge about workflows, team dynamics, and operational nuances that the C-suite rarely encountered firsthand.

The 2000s: technology and globalisation transform corporate structures

The 2000s saw a rapid acceleration in the role of technology and globalisation in reshaping organisations. The growth of the Internet, cloud computing, and global supply chains required companies to become more agile and distributed. However, as organisations became more geographically dispersed, middle management continued to shrink, driven by a focus on efficiency and cost-cutting. For workspaces this agility meant shorter leases, the early rise of flexible offices and hot desking.

During this time, the support staff — departments like HR, IT, and FM — also saw significant changes. HR and FM were expected to take on more strategic roles and were expected to do more with fewer resources. Meanwhile, the technostructure expanded further as companies implemented more complex IT systems to manage global operations. However, without middle management to serve as intermediaries, the C-suite became increasingly disconnected from the day-to-day realities of how work was being done. Decisions about space utilisation, employee engagement, and team dynamics were now driven more by data, with a focus on utilisation, than by human insight or employee satisfaction.

The 2010s: automation and the inception of artificial intelligence

The 2010s marked the beginning of widespread automation and the rise of artificial intelligence (AI) in corporate structures. Automation, once limited to manufacturing, began to infiltrate office functions. AI tools were adopted to handle tasks like data analysis, scheduling, and even employee performance management.

At the same time, the role of middle management continued to decline even further. More organisations implemented self-managed autonomous teams and flatter structures, expecting frontline employees to take on responsibilities that were traditionally handled by middle managers. The technostructure became even more powerful, as data analytics and AI-driven decision-making took centre stage.

However, this shift came at a cost: the further erosion of workplace fabric knowledge. Middle managers once acted as the translators of corporate strategy into operational reality, providing valuable insights into team dynamics, informal networks, and the culture of the organisation. Furthermore the autonomous teams approach fragmented the knowledge transfer, often into silos. With the reduction in middle management, and the fragmentation of autonomy, organisations began to lose this tacit knowledge, leading to an overreliance on hard data, which often failed to capture the complexities of human interactions, both formal and social, and the complex dynamics of the workplace.

2020s: the pandemic, remote work, and the AI revolution

The 2020s brought unprecedented disruption with the COVID-19 pandemic. Remote work became the norm for millions of employees, and organisations scrambled to adapt. Whilst the initial enforced response was to work remotely from home, most companies evolved and embraced flexible work models. The era of hybrid working was created and for many employees this was a favoured model that was expected to stay. However, the post-pandemic period has seen a growing divide between leadership and employees on the effectiveness of hybrid work.

Many companies, including Amazon and Tesla, are now mandating a return to the office. Amazon plans to bring workers back by 2025, and Tesla has already pushed for full in-office work. According to KPMG's 2023 report, many CEOs expect a full return to the office, citing concerns over productivity, collaboration, and corporate culture. Yet, reports like those from Urbanite Advisors reveal that many employees prefer remote work and feel they are more productive outside the traditional office environment. Indeed, the first published empirical study of hybrid working by Nicholas Bloom2 showed that the hybrid workers generally had increased job satisfaction and reduced resignation rates and were as productive as those who worked entirely in-person, as measured by performance reviews.

This disconnect is largely because today's corporate leaders lack the workplace fabric knowledge that middle managers once provided. Without middle management to offer insights into how work is being done — especially in hybrid and remote models — executive decision-making risks becoming disconnected from the reality of the processes, activities and sentiments of the workforce.

The role of HR, FM, IT, and Real Estate today

Each of these departments has experienced significant shifts within the corporate structure, with varying impacts:

  1. Human Resources (HR). With the decline of middle management, HR has been thrust into a more strategic position, managing employee engagement, well-being, and performance at scale. However, without middle management to provide on-the-ground insights, HR often relies heavily on technology, such as AI-driven sentiment analysis. This leaves HR with less of a human touch in an era where workplace culture and employee experience are more critical than ever.
  2. Facilities Management (FM). FM teams are tasked with optimizing physical spaces, but without the tacit knowledge that middle management once provided, they often rely on raw data. This can lead to space designs that don't fully align with how teams collaborate and use office environments, especially in hybrid models.
  3. Information Technology (IT). The role of IT has grown significantly, with IT departments becoming central to organizational strategy. However, IT often struggles to balance technological solutions with the human aspects of work. Without middle management, IT leaders may not fully understand how technology is impacting day-to-day operations and employee satisfaction.
  4. (Corporate) Real Estate. With the shrinking of the physical office footprint, real estate strategies have shifted dramatically. However, real estate decisions are often made based on cost efficiency rather than on how office space supports company culture or employee engagement.

The most significant change over the last few decades has been the hollowing out of the middle line — the crucial layer of middle managers responsible for translating strategy into operational reality. As this layer disappears, the technostructure has expanded, with AI and automation absorbing many of the decision-making and optimization roles once filled by humans.

What is missing, and how Workplaced restores the workplace fabric knowledge

In the face of these changes, organisations are missing a critical component of knowledge: the human insight once provided by middle management. This is where Workplaced offers solutions.

  1. Human Resources (HR). Workplaced provides real-time employee sentiment and engagement data, helping HR teams develop flexible policies that reflect both employee preferences and organizational needs.
  2. Facilities Management (FM). Workplaced offers detailed workplace utilization data, going beyond raw metrics to capture how teams actually use office spaces and collaborate. This helps FM teams design spaces that align with both operational and cultural goals.
  3. Information Technology (IT). Workplaced integrates technology with real-time feedback from employees, ensuring that IT investments are aligned with how people work, not just leadership's expectations.
  4. (Corporate) Real Estate. Workplaced bridges the gap between cost-saving real estate strategies and the human experience. We provide insights into how space utilization impacts culture, engagement, and productivity, helping companies make more informed decisions about their office environments.

As AI and automation continue to reshape the workforce, organisations must recognise the limits of data-driven decision-making. The tacit, human-centred knowledge that middle management once provided is irreplaceable.

By working with Workplaced, organisations can regain that lost human centric insight and make better, more informed decisions about the future of work. Capturing a detailed understanding of the processes, activities and sentiments of the workforce helps reconnect the fabric of knowledge, proven to be essential for productive office environments.

Resources & Citations

  1. Mintzberg, H. | 1979 | The Structuring of Organizations | Prentice-Hall
  2. Bloom, N., Han, R. & Liang, J. | 2024 | Hybrid working from home improves retention without damaging performance | Nature | doi.org/10.1038/s41586-024-07500-2