The adoption of Generative Artificial Intelligence (GAI), including tools like ChatGPT, is profoundly reshaping organizational landscapes. These technologies enhance creativity, decision-making, and automation, challenging traditional workflows and managerial practices. Middle managers, positioned between strategic decisions and daily operations, play a pivotal role in bridging these transformations. However, the micro-level dynamics of their evolving roles and competencies remain underexplored, particularly within specific industries like telecommunications or hybrid service firms. This study uses activity theory to analyze the tensions and contradictions arising from GAI adoption, focusing on its impact on middle managers. It identifies key mechanisms such as Bottom-Up innovation dynamics, Shadow IT, and shifts in governance frameworks. Findings from diverse organizational contexts highlight the need for structured approaches to skill development, balancing technical and human-centric competencies. This research contributes to understanding managerial transformation and offers actionable strategies for organizations to navigate the complexities of GAI integration effectively.