27-05-2025
As Big Tech Cuts Management Roles, Leadership Gaps Threaten Productivity And Engagement
Over the past year, manager engagement has taken a noticeable nose dive. According to Gallup's most recent 'State of the Global Workplace Report,' manager engagement fell from 30% to 27% in 2024.
A workplace trend known as unbossing (also popularly termed the 'great flattening') may be contributing to declining manager engagement. As this author reported previously, in the past year, big tech companies, including Meta and Salesforce, have trimmed management layers to boost efficiency. Most recently, Microsoft joined the trend, cutting many of its managers as part of the company's largest mass layoff since 2023.
While streamlining management layers can enable innovation by empowering employees to make decisions independently, it also carries significant risks. Cutting too many key leadership roles may result in a disengaged, overworked and underproductive team.
According to Korn Ferry's 'Workforce 2025' survey, nearly half of employees say their organizations have slashed management layers, and more than a third report feeling directionless due to the lack of managerial guidance. What's more, 43% of senior executives expressed doubt about their ability to take on the responsibilities left behind by eliminated management roles.
Gallup's report also notes that 70% of team engagement is attributable to managers. This underscores how critical managers are for driving company performance, especially considering Gallup's estimate that a fully engaged global workforce could boost the world economy by $9.6 trillion, or roughly 9% of global GDP.
Increasing efficiency as a flat organization requires more planning than just eliminating management roles. To ensure that flattening organizational hierarchies improves business outcomes, executives might consider developing strategies that promote self-direction and career growth in nonmanagerial areas.
In its article titled 'How to Successfully Scale a Flat Organization,' Harvard Business Review addresses how companies can maintain a flat structure while still achieving growth objectives. The article's authors—Eero Vaara, Anni Harju, Mia Leppälä, and Mickaël Buffart—explain that a successful flat organization can be scaled by allowing teams high degrees of autonomy, facilitating strategic decision-making, maintaining transparency about company performance, encouraging learning from failure, and consistently communicating the company's mission and values. This way, the company builds a self-directed working model that can withstand and even flourish with less managerial support and oversight.
Companies aiming to thin management layers may also explore implementing dual-track promotion programs. Models used by companies such as Shopify and Google allow employees to advance into roles that emphasize industry expertise and don't require transitioning into people management for career growth.
Gallup's report also outlines strategies for empowering managers and mitigating levels of disengagement. For instance, Gallup found that fewer than half of managers globally say they've received management training. It therefore recommends that companies expand access to professional development opportunities. The report further indicates that when managers have training and a supervisor or mentor to actively encourage their development, their likelihood of thriving in their role increases by 50%. As Gallup states, manager development opportunities may represent 'one of the most effective 'wellbeing initiatives' that employers can invest in.'
When executed effectively, thinning management layers can create a more productive workforce with less micromanagement and bureaucracy. However, if implemented poorly, flattening organizational hierarchies can cause employee disengagement and diminish team performance. As Lesley Uren, CEO of Korn Ferry's global consulting business, warns in response to the company's 'Workforce 2025' survey, 'When management disappears, so does direction. A leaner organization today can mean a leadership crisis tomorrow.' Organizational flattening should strengthen, not weaken, a company's ability to thrive. Otherwise, restructuring meant to lift performance could end up flattening profits instead.
