Microsoft is cutting management layers in its core workplace software organisation, including Office and Teams, and expanding in-office work for senior employees as it adapts to the AI era. As AI agent-based development spreads, it is also changing how the organisation is run.

Business Insider reported on Oct. 29 that Charles Lamanna (찰스 라만나), head of Microsoft Copilot, Agents and Platform (CAP), recently reorganised the Teams engineering group so one manager is responsible for 12 contributors. Some managers shifted into individual contributor roles that directly perform development and technical work.

Lamanna also took over the Office and Teams business earlier this month from Ryan Roslansky (라이언 로슬랜스키). Roslansky plans to leave at the end of the year and will support the organisational transition as an adviser to Microsoft CEO Satya Nadella until then.

Lamanna will now oversee both existing productivity software and next-generation AI tools. The overhaul is seen as an extension of the AI-focused reorganisation Nadella is pursuing.

A key driver of the reorganisation is the spread of AI coding agents. Microsoft explained that engineers' roles are shifting from writing code line by line to designing and directing development work performed by AI.

As a result, the importance of technical judgement, system design, quality and security management, and understanding customer needs is growing. At the same time, it sees a decline in work that required traditional managers, such as cross-department coordination and handovers.

Microsoft said reducing layers of management can speed decision-making and strengthen employee autonomy and accountability. It said similar reorganisations have taken place in other groups.

Work arrangements are also changing. Lamanna required senior staff at partner level and above in his organisation to work in the office at least 4 days a week. This is stricter than the company's general standard of 3 days a week in the office.

Some U.S. employees were also offered the option to relocate their workplace to the Redmond, Washington headquarters and offices in San Francisco and New York.

Lamanna said in August that his most important task this year was changing how work itself is done, rather than launching individual products. The move shows that adopting AI is reshaping not only work automation but also organisational structures and workplace culture at big tech companies.