Middle managers, beware: The Great Flattening layoff trend has moved beyond Big Tech and into retailers like Walmart

Business Insider

a day ago

Middle managers in Big Tech, and now at Walmart, have faced major layoffs.
Recession fears and tariff uncertainty are driving companies to cut costs.
The trend, known as "The Great Flattening," is spreading.
It's a tough time to be a middle manager.
Companies are looking for ways to cut costs, and mid-career employees' jobs are increasingly on the chopping block.
Earlier this year, Big Tech giants like Google, Intel, and Amazon announced their plans to lay off thousands of workers, mostly managers. Last week, the trend hit Walmart, which said it will "remove layers and complexity" by reducing its labor force by 1,500 people, many of them in midlevel corporate roles. Retailer Wayfair also recently laid off managers, and some companies like fintech firm Block are moving managers into non-management roles.
The latest manager purge is partially a symptom of a US economy rocked by recession fears and federal tariff whiplash. Several companies — including Walmart — have begun to raise prices because President Donald Trump's proposed levies are hiking their overhead costs.
Reducing higher-paid, midlevel employees is another way for them to save money and streamline corporate bureaucracy. What's more, workplace efficiency is en vogue at the federal level, with Elon Musk and the White House's DOGE office spearheading a widespread staff reduction at government agencies. It's all adding up to 2025's " Great Flattening."
The 'Great Flattening' is a management philosophy and a way to cut costs
CEO Mark Zuckerberg said in 2023 alongside a bout of Meta layoffs that " flatter is faster."
"I don't think you want a management structure that's just managers managing managers, managing managers, managing managers, managing the people who are doing the work," he said.
Amazon CEO Andy Jassy similarly said in 2024, "Having fewer managers will remove layers and flatten organizations more than they are today."
Daniel Zhao, lead economist at the job-search platform Glassdoor, told Business Insider that this flattening isn't a random financial fluke, but the result of yearslong labor market trends. He said companies across industries opted for "rapid headcount growth" in the early pandemic years. To accommodate a slew of new hires, many of these companies needed more middle managers to train young talent. Zhao added that some companies were primed to " hand out promotions into the management ranks to attract and retain high performers during the labor shortages era" of the early 2020s.
With recent hiring slowdowns, Zhao said that this inflated middle management tier is becoming less necessary.
"When the economy shifts into a lower gear, companies start looking for where they can cut workforce costs, often looking at high-salaried managers," he said. "And as companies slow down hiring, the need for onboarding and training new workers diminishes."
Despite this trend, the labor market is still strong on paper, and overall, layoffs are low. And, while "The Great Flattening" is ramping up, it also isn't new. Big Tech's layoffs of early- and mid-career workers have been happening on and off for years. Walmart's recent announcement signals that the strategy is gaining broader appeal.
Middle managers are feeling the heat
Gallup reported that overall employee engagement dropped to its lowest level in a decade last year, and Glassdoor's Employee Confidence Index shows that less than half of midlevel employees have a positive business outlook about their employers as of April, the lowest figure since the job-search platform began measuring employee confidence in 2016. Glassdoor data published in November also shows that laid-off middle managers often have to take lower-seniority or lower-salaried positions to break back into the workforce. Those who aren't laid off and remain managers could find themselves with an overwhelming amount of direct reports.
BI has heard from over 750 Americans of all ages about their experiences with the job market. Some are boomeranging back to old employers, while others are left empty-handed despite hundreds of applications. Many job seekers have become so frustrated by rejections and ghosting that they're taking whatever roles they can find.
Zhao said the flattening is likely to impact more than just managers. Each industry hit by layoffs could disrupt its traditional career ladder, especially for young people.
As Zhao put it: "This trend also creates bunching down at the bottom of the career ladder as former managers compete for roles that traditionally would be opportunities for entry-level or experienced hires to move up the career ladder."