‘Unbossing’: How to Apply an Old Trend for a New Generation

You may have seen or heard a new term recently in the news: “unbossing.” It effectively means reducing the number of managers in an organization. The idea is hardly new— – organizations for decades have critically evaluated the number of managers or “middle managers,” to figure out if those management layers add enough value. Things like span of control analyses, delayering exercises, and management impact analysis have all taken slightly different analytical approaches to answering this question. Over the last couple years, this work has kicked into overdrive:

In April 2022, biopharma giant Novartis announced it would restructure its pharmaceutical and oncology business units under one umbrella in an effort to save $1 billion a year, eliminating scores of managers and entire management layers. Another pharmaceutical manufacturer, Bayer, reduced more than 1,500 roles in the first three months of 2024, two-thirds of which were management positions. Citigroup also restructured in the past year, cutting 5,000 jobs and reducing its number of managerial layers from 13 to eight.

Bloomberg reported in March that almost one-third of layoffs among white collar workers were middle management positions, up from 20% in 2018. “The cuts come as ‘efficiency’ becomes executives’ favorite earnings call watchword,” wrote Jo Costantz. “Done poorly, cutting out entire organizational layers can backfire. Middle managers play a crucial role in helping companies run smoothly, from training and coaching more junior employees to supporting teams through upheaval (like, say, transforming how a company works with AI). The problem is that those contributions, though essential, defy measurement.”

So why has “unbossing” come back (albeit under a new name) so aggressively? The reasons for the surge are more complex than the singular pursuit of efficiency. Not all are universally applicable. Here’s a quick breakdown on some of the reasons this is back on the front burner for many companies today:

Economic Forces

A few broad economic forces stand out as major drivers of the unbossing trend:

1. Organic and inorganic growth are more difficult to achieve today, leading to a focus on costs and a stronger microscope on organizational investments. Rising interest rates have made borrowing cash much more expensive, which means fewer projects, investments and acquisitions. And when borrowing is needed, lenders rely on projected cash flows to determine the company’s ability to take on debt. All of this is forcing companies to examine costs more closely and try to find growth through cost controls while revenue expansion or M&A cools down. 
   
2. A domino effect from prior restructuring efforts. Many companies have already cut lower-level roles, either during COVID, or after when the short-term burst of demand for some industries evaporated (including many technology businesses). As a result, many organizations were left with a misshapen corporate pyramid: bigger in the middle, but smaller on the top and bottom.  That middle layer appears bloated as fewer people report to middle managers. Trimming from this layer is relatively efficient from a bottom-line perspective: cutting one higher-salaried manager can save as much money as cutting two or more junior employees, and if there were only a few employees reporting to that individual, an organization can ask one manager to increase the span of their control and pick up another manager’s direct reports.
   
3. A desire to increase speed and agility. Some businesses discover that as they have become bigger, decision making gets more bureaucratic and good ideas are harder to surface to the top as it gets “filtered” through many management layers. If they want to speed up execution, or respond more quickly to changes in the market, sometimes organizations feel a flatter organization allows more senior leaders to be hearing directly from those on the ground and react more quickly and efficiently to the needs of the business or the consumer. Technology has also enabled this shift, as senior leaders can now directly receive the information on business performance and potential issues much more quickly due to automated reporting and dashboards, real-time survey findings, and strong business intelligence tools. In the past, a significant number of managers were required to do that work – which isn’t the case today. 

Pros and Cons

Companies that are considering reducing their management structure or management layers should be careful to understand the implications: while some advantages exist, there are some real drawbacks, and if all the specific implications for your business are not well understood, it can lead to unintended consequences.   

Advantages: other than cost savings, these are just some of the advantages companies may see

• Provides some employees the opportunity to take on more responsibilities: in some cases, this is a great chance for high potential employees to spread their wings a bit and grow in the organization.
• Can increase employee satisfaction through increased empowerment: with fewer managers, employees will be asked to make more decisions themselves, which increases their feelings of autonomy and satisfaction in the role
• More access to senior leadership and more visibility for leaders: without an intermediate layer, employees have increased opportunities to take ideas directly to senior management—ideas that can benefit the organization as a whole. At the same time, senior leaders gain a greater appreciation for the challenges and struggles employees face on the ground level of the organization, which can spur actions and quicker fixes

Disadvantages:

• Increased workload for remaining middle managers, which can lead to burnout: trimming management roles likely means there’s more work to go around and fewer people to do it. Middle managers who once had 7-10 direct reports might now have 15-20. Getting through all those 1:1s and responding to inquiries or needs can lead to managers feeling overwhelmed and ineffective
• Less mentorship and guidance for junior staff: employees of a middle manager who now has 15-20 directs may not get their needs met as quickly and may get far less time from their manager. This can lead to less professional growth, and a lack of skill progression without the right guidance. And a degradation in the relationship between manager and employee are one of the top reasons for employee turnover: middle managers often organize meetings and create structures for interaction that are valuable for building teamwork; without these structures, workflows can deteriorate, and a sense of connection might be lost.
• Senior executives may get pulled into tactical details, reducing their focus on the big picture: if middle managers are eliminated, senior leaders are pulled into the details of execution, and while that may lead to some insights, it can come at the opportunity cost of reducing the focus of these expensive resources on more value-creating activities, or helping to determine what the next growth strategy should be for the company. Senior executives also may not have the skills to support junior employees’ needs effectively.

Practical Considerations

What works for one organization might not work for another. Leaders must consider their own unique situation before embracing any new trend; unbossing is no different in that regard. Here are a few practical considerations:

1. Understand what problem you’re trying to solve. Across the board cuts to management layers may not be appropriate and a more nuanced approach may be needed. Where in your business are costs out of line with revenues, or out of line vs. industry benchmarks? Where do you think your business will evolve, and what areas are therefore less critical and perhaps less important to the go-forward strategy? How dramatically do costs need to be reduced and where can those savings be found most effectively?
2. Look at the data. Evaluate how many managers you have in each organization and at each level/layer in the organization. Look at their number of direct reports and highlight those who have fewer for evaluation. Inspect your engagement survey data to see how managers are perceived by employees and where issues exist. Understand the typical ratios for functional departments (e.g., how many recruiters are typically needed given the number and types of roles you are hiring for?)
3. Other considerations. Think through where your organizational goals might align with cutting middle managers. Are you slow in getting new product ideas off the ground? Is there a lot of red tape around ground-level workers submitting ideas effectively to senior leaders? Which areas or departments within your organization need to be nimbler and more efficient, and which don’t?   Whenever reducing roles are on the table, make sure you are keeping representation in mind.  Understand the implications of planned reductions on gender or underrepresented groups and ensure the selection rationale is clear and without any unintended bias

Conclusion

Unbossing is back on the forefront of many business leaders’ agendas today, and in some cases for good reasons, but remember anything taken to the extremes creates bad outcomes. There will always be a need for middle managers at some level as they can be essential for executing strategy goals. Their support, management, and guidance are valuable to colleagues above and below them on the corporate ladder. A good middle manager plays an essential role in keeping team members engaged, making your organization a better place to work.

Be thoughtful, pragmatic and use the data available to you. Take a balanced approach. Be mindful of who’s taking on more work. Remember that when middle managers are lost, both senior executives and junior employees will feel the effects. Some organizations will have people ready to step up and others won’t, so be wary of unbossing as a one-size-fits-all approach and ensure the moves you do make get the benefits you are seeking.

Jesse Meschuk is a Human Capital Advisor, and career and HR expert with more than 20 years of consulting and human resources experience. Jesse specializes in helping companies define and execute their human capital strategy across the entire employee value proposition in a wide variety of industries including technology, entertainment, gaming, retail, hospitality, manufacturing, and sports.