Why cutting middle management keeps backfiring

ASML posted record sales of €32.7 billion last year. Then cut 1,700 management roles. ABN Amro announced 5,200 job cuts by 2028. Philips has been reducing layers for over a year. Globally, over 80,000 tech #jobs were cut in Q1 alone. Google removed 35% of its managers last year.

None of these companies are in trouble. All of them are removing the middle.

This pattern showed up in last week's Q1 2026 overview and it's shaping the current landscape so much that I wanted to do a deeper dive.

How is the disappearing middle management changing your reality at #work?

Your Engineering Manager gets cut. You're a medior engineer. Who do you go to now? The Director, who suddenly has 20 direct reports and is in meetings until 7pm? A senior engineer who's still doing their own IC work and has no coaching experience?

Korn Ferry found that 37% of workers who lost their direct manager felt directionless afterward. I'd bet the real number is higher; most people just don't say it out loud.

Why don't these changes have the desired effect?

There's a theory from the 1930s that explains exactly why this keeps breaking down. V.A. Graicunas, a management theorist, showed that every additional direct report doesn't just add one more relationship for the manager. Instead, it creates a web of cross-relationships that grows exponentially.

Going from 4 to 5 direct reports increases the number of relationships a manager must track from 44 to 100. That's a 127% jump in complexity for a 20% increase in team size.

Why do organizations keep making them?

I've seen this play out firsthand across multiple scale-ups during my years in #HR. On paper, the restructure looks clean: one layer removed, reporting lines redrawn, done. In practice, within weeks the informal #coaching stops and decisions get pushed up to people with no real decision-making power.

The structure looks simpler. The work gets harder for everyone.

Real life example: Klarna cut roughly 1,200 roles in 2023 and replaced much of its customer service with #AI. The CEO said AI could do all the jobs humans do. Six months later, customer satisfaction dropped, quality slipped, and they started rehiring.

What can leaders actually do before the gap shows up on the org chart?

Before cutting a role, map what it actually produces: the coaching, the translation, the early warnings. If that work can't be redistributed, the savings are temporary. And before expanding someone's span from 5 to 12, remember: Graicunas proved the complexity multiplies. That's how managers become approval layers instead of leaders.

Dutch organizations always operated with fewer layers than most markets. But flat structures work when the people in them are supported. Remove that support and flat just means hollow.

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Sparking Leadership # 45: a weekly series on human-centered, sustainable #leadership. Lead with spark!