The latest corporate buzzword is efficiency, and that hasn’t been good for much-maligned middle managers. If you’ve got direct reports, you should probably be looking over your shoulder.
“It’s always been a joke with my peers that middle management is the most dangerous position to be in,” said Cody Sandell, who lost his job late last year as a director of product management at a fintech startup.
Middle managers — defined as non-executives who oversee employees — made up almost a third of layoffs, up from 20% in 2018, according to an analysis by Live Data Technologies for Bloomberg News.
Middle Managers Make Up a Growing Share of Layoffs
Annual average percentage of layoffs by seniority
Source: Live Data Technologies
In January, United Parcel Service Inc. said it would save more than $1 billion by slashing 12,000 manager jobs. Citigroup Inc. aims to eliminate 20,000 roles over the next several years, slimming down to eight management layers from 13. And more might be coming; mentions of “operational efficiency” in the US hit the highest on record this earnings season, according to an analysis by Morgan Stanley.
Meanwhile, middle managers’ confidence in their employers dropped to a record low last month — matching entry-level workers — as pressure mounts to do more with less, according to a report from job-review site Glassdoor.
The allure of a slimmer organization has been around for decades: The ideal of the “lean and mean” organization was popularized in the 1980s by General Electric Co.’s CEO Jack Welch. The use of efficiency follows other euphemisms for laying off staff like streamlining and downsizing, but appears more pointed at middle managers because they have higher salaries and usually don’t contribute directly to a project by, for example, coding or making sales calls.
‘Messed Up’
Mark Zuckerberg became a leading critic of top-heavy org charts last year as results at Meta Platforms Inc. weakened. The company went on a hiring spree chasing his metaverse fever dream, and when that strategy fizzled he declared 2023 the “Year of Efficiency” and whacked entire layers of management.
“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,” Zuckerberg told staff last year in an all-hands meeting, according to a report from the Verge.
Elon Musk has called out bloated management levels, too. After taking over Twitter in 2022, he said on the platform that the most “messed up” thing about the company was that there seemed to be 10 people ‘managing’ for every one person coding.
But cutting middle management can backfire by leading to uncertainty. At Meta, employees’ workflows stalled in the wake of layoffs as many were left anxious about the company’s direction. An important part of being a manager is making your employees feel supported and valued. Without them, some measure of that support is taken away, since higher-ups won’t have time to devote much personalized attention.
“There are more impacts to morale that I don’t think companies quantify,” Sandell said. “It’s hard to put a value on that.”
Proving how much value they add has long been a struggle for managers (cue the “What would you say...you do here” scene from Office Space). Their days are filled with intangibles like coaching staffers or building consensus among team members. That makes measuring effectiveness much more complicated than counting lines of code or customer retention.
Kendall Smith led a marketing team at a healthcare staffing tech startup before she was recently let go after surviving previous rounds of layoffs. That marked the second time she’d been let go in 14 months amid the wider Silicon Valley slump. Along the way, she saw patterns emerge.
“That middle layer is the most vulnerable because they can’t quantify their impact quite as much,” Smith said.
Smith said demonstrating her worth quickly became a top priority after surviving the first round of cuts. She documented her efforts more often and figured out ways to share her work directly with top executives. Another survivor strategy is taking on a player-coach role in which managers lead teams while also directly contributing.
“I definitely focused on talking more about the work,” she said.
But in the end, that still wasn’t enough.