Flattening, unbossing, going hands-off… whatever you call it, the latest in leadership trends for American companies is a threat to the very existence of the hallowed Master of Business Administration.
For decades, an MBA has been a clear ticket to the ranks of middle management in major American companies. With critical quantitative analysis, leadership, and communication skills, they are ideally prepared to take on a department lead or team manager role after graduation.
But corporate flattening is thinning those jobs out quickly.
In 2023, according to Business Insider, middle management positions account for nearly a third of all layoffs in corporate America. That’s a ten percent increase since 2018.
And there are good odds that those jobs, the traditional destination for new MBA graduates, aren’t coming back anytime soon.
Middle Managers Have Long Been Disparaged, but Have Remained Relevant for Good Reasons
In a sense, middle management should always be on the chopping block. Neither making grand strategic decisions or contributing directly to productivity, they are almost the definition of financial fat in any organization.
Like fat, however, they can play an important role in the function of the business. They lubricate decision flow, translate the big picture into actionable processes, and insulate upper layers against excessive detail. At the same time, they provide insight and vision unavailable to those disconnected from daily operations.
Just as important, but obvious to many MBA students in California and elsewhere, middle management ranks are the training ground for future occupants of C-suite offices. Without the decades-long apprenticeship in the trenches of on-the-ground decision-making that a stint in middle management provides, it’s not clear where these companies plan to recruit leadership for the future.
You Have Fellow MBA Graduates at the Helm of California Companies To Thank for Threatening Management Job Prospects
Unsurprisingly, it’s MBAs themselves who have come up with this model. McKinsey, the “M” in the MBB Big Three consulting firms that hoover up hundreds of MBA grads from top business schools each year, has been advising flatter hierarchies since at least 2020.
But the concept didn’t really seem to take off until California tech companies got into the game. “Fitter, flatter, faster” is the mantra, deploying exotic helix operating models and agile structures borrowed from the software development world.
The COVID-19 pandemic threw gas on the fire, creating big shake-ups in organization and supervision as a result of the overnight shift to remote work.
Yet even as remote work has been eliminated by Silicon Valley’s tech juggernauts, trimming management ranks has remained popular. Meta’s Mark Zuckerberg has been on the warpath about reducing management layers since at least 2023, and the company followed it up by laying off more than 20,000 staff and managers.
While the long-term impacts of hollowing out middle management have yet to be seen, the market has already spoken: Meta’s stock zoomed up to a $1 trillion cap after the layoffs.
And some new companies are being put together without any middle managers in the first place. DoorDash, based in San Francisco, was recently analyzed by UC Berkeley’s California Management Review and found to have allocated almost all traditional middle management decision making to AI right from the start.
Artificial Intelligence Is Coming for Middle Management Jobs
Naturally, though, one of the most significant contributors to unbossing may be artificial intelligence.
Through developments at California tech giants like Google and OpenAI, AI is starting to take on some of the traditional training and career development work of middle managers at companies like Novartis. Online AI tools quiz staff on job goals, assess talents, and provide guidance and training that might once have come from their team leader.
Other California businesses, like Airbnb, are experimenting with consolidating traditional product management jobs by folding them into marketing… something that long-time Silicon Valley titan Apple has been doing for decades.
This takes a real bite out of the traditional value contribution of MBA graduates just entering the workforce. And because the call is coming from inside the tech building, it’s hitting California business schools harder than others. A report by Clear Admit in 2024 found a decline of as much as eight percent in tech industry job placements from even top California MBA programs. That’s flagged by a clear drop in MBA hiring overall at big Silicon Valley employers like Apple and Google.
But there are reasons you may still be better off with a high-quality California MBA than without one.
An MBA From a California University Is Your Best Shot at Filling Leadership Roles After the Great Flattening
All of those forces come into play in the market as a whole. Ironically, however, they may actually strengthen the case for earning an MBA at the individual level.
As it’s always been, a Master of Business Administration is a powerful differentiator for students who have earned it at one of the many well-respected programs in California. If the market is shedding management layers, the last ones to go are going to be the people who have proven their management mettle with an MBA.
Ultimately, it’s also true that middle management jobs have been put in place to solve specific problems—issues of supervision, motivation, and coordination. Those problems aren’t going to be magicked away by AI or CEO fiat. Whatever the new solutions are, they are more likely to come from someone who has an MBA under their belt.
There are also plenty of opportunities at California schools like Claremont Graduate University or Humphrey’s University to pick up MBAs with an information technology concentration… giving you an edge in jobs that involve building middle management replacement tools in the first place.
Like Many Overhyped Business Trends, Unbossing May Be Unsustainable
Something else an MBA will offer you is perspective. And there is nothing quite so comforting in that department as the realization that innovations in business leadership often fall flat on their face when they turn into a trend.
Jack Welch is a name you’ll learn in some class or another if you don’t know it already. The legendary leader of iconic American company General Electric revolutionized the business world with his emphasis on cost-cutting and quarterly earnings. Legions of Welchian acolytes spread out into business and turned the quarterly report into the godhead of American industry.
As a short-term focal point that investors and managers could aim at, cost-cutting and quarterly reports greatly simplified the connection between profits and value.
But in the long-term, it may have wrecked many American companies. Welch’s job cuts and factory closures boosted the balance sheets but gutted domestic production and sent jobs overseas. The formula took GE, a juggernaut which at one point represented something like one percent of American GDP, and eventually shattered it, with three tiny spin-offs emerging as the great company finally died in 2024.
Similarly, Boeing, dominated by GE acolytes after it merged with California’s McDonnell Douglas in 1997, suffered catastrophic manufacturing and planning failures that have left the company scrambling to remain relevant against overseas competitors.
The general elimination of middle management jobs in the pursuit of higher corporate profits smacks of short-sighted business planning that fails to weigh higher salaries against important contributions in the workforce.
So there are plenty of lessons about execution in business fads. Companies that can make flat work may well stick with it. Imitators that need the grease that accomplished middle managers inject into bureaucracy will be hiring again soon enough. Your MBA will put you right at the top of the stack when those companies need to be rescued.