Package managers are essential tools in software development that automate the process of installing, upgrading, configuring, and removing software packages. They help manage dependencies, ensuring that the right versions of libraries and tools are available for a project, which simplifies the development workflow and reduces conflicts. By using package managers like npm for JavaScript or pip for Python, developers can easily share and reuse code, making it more efficient to build applications. These tools also provide a centralized repository for packages, allowing users to discover and install software with minimal effort, enhancing productivity in software development.