Bonfire of the Middle Managers

American companies have begun cutting middle management positions at rates not seen in years. Google eliminated 35% of managers overseeing teams of fewer than three in August. Fiverr announced in September it would shed managers to focus on AI. Amazon trimmed its management ranks throughout the year and cut positions at its cloud-computing division in July. Meta's Mark Zuckerberg has complained about managers managing managers since 2023.

Phrases relating to reducing management layers appeared 98 times on earnings calls of companies in the S&P global index this year, twice the frequency of all of 2022. The cuts stem partly from an uncertain economic environment and President Donald Trump's tariff regime, Economist writes. The pandemic created the conditions for the current retrenchment. Companies furloughed staff during Covid-19 and then hired rapidly to meet demand for e-commerce and digital services. They promoted employees to management positions to retain talent even when those managers supervised only one or two subordinates. Between 2019 and 2024, five of the ten fastest-growing job categories were management roles. Since November 2022, listed American companies have cut middle-management positions by around 3% on average.

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