The Great Flattening – the trend of eliminating middle managers to cut costs, reduce bureaucracy, and streamline organizational charts – is rapidly spreading across industries. What began in the tech sector is now reshaping corporate structures in retail, finance, and even government.

Tech giants such as Amazon, Microsoft, and Google initiated widespread flattening last year. More recently, retailers like Walmart, Wayfair, and Starbucks, along with financial leaders such as HSBC and Ernst & Young, followed suit. Even the federal government has embraced the concept through the Department of Government Efficiency’s push to boost productivity.

The numbers highlight how significant this shift has become. According to job-tracker Live Data Technologies, middle managers represented 29% of all layoffs in 2024, which is a sharp increase from the 20% average seen between 2018 and 2022. Meanwhile, Revelio Labs reports that job postings for middle-management positions have declined more than 40% since 2022. For many organizations, it’s not just about letting middle managers go; it’s about choosing not to replace them.

The Great Flattening can be viewed through two lenses. On the positive side, fewer layers of management reduce costs and red tape, creating leaner, more agile organizations. Decisions can move faster, and employees who once felt constrained by hierarchy may find new opportunities to demonstrate initiative and talent.

The downside, however, is harder to ignore. Middle managers often provide essential guidance, accountability, and motivation. Without them, organizations risk miscommunication, errors, and reduced productivity. Employee morale can also falter when there’s no direct support between executives and frontline workers.

“Beyond the direct negative impact to middle managers who have to compete for a new job in an already challenged labor market, the greatest suffering will be among individual contributors on teams where middle managers have been made obsolete,” explains Brad Smith, Chief Science Officer at meQuilibrium (meQ). “Execution of corporate strategy is also likely to suffer. Middle managers have historically been the filterers and translators into action of senior executives’ business-speak.”

meQ’s State of the Workforce studies reinforce the critical role middle managers play. Over the past five years, the research consistently shows that employee well-being, engagement, and retention are strongly linked to managers who are intentional about supporting their teams. Without this layer of leadership, risks of burnout, turnover, and declining workplace culture grow significantly.

The Great Flattening may streamline costs and structures, but the long-term impact on people and performance could be far more costly.