---
title: A Shrinking Market for Management Talent As Employee Experience Takes the Hit
description: Flattened organisations and middle management cuts swell spans of control and strain managers, as AI tools fall short and employee engagement slides fast.
author: Dr Marina Nani (Editor-in-Chief)
date: 2025-09-01T13:00:46.000Z
updated: 2026-04-01T12:28:36.117Z
canonical: https://www.sovereignmagazine.com/article/a-shrinking-market-for-management-talent-as-employee-experience-takes-the-hit
image: https://cdn.nanimediahouse.com/b33izpmhd18.jpg
categories: HR & Recruiting
content_type: Analysis
region: United States
publication: Sovereign Magazine
---

When Bank of America and dozens of other major corporations decided to ‘flatten’ their organisations by cutting middle management, they promised increased agility and reduced costs. Instead, they created a workplace crisis where managers now oversee three times as many employees as in 2017, leaving workers without the personal connection and guidance that defines positive employee experience.

The scale of this corporate restructuring has reached unprecedented levels. [Major corporations have reduced middle management roles by 6.1%](https://www.forbes.com/sites/bryanrobinson/2025/01/24/the-great-flattening-trend-is-picking-up-steam-in-2025/) between May 2022 and May 2025, according to recent industry analysis. Companies like Amazon, Google, Citigroup and UPS have aggressively eliminated managerial positions as part of cost-cutting initiatives.

## Major Corporations Drive Mass Layoffs

UPS eliminated 12,000 management positions, whilst Citigroup reduced its management layers from 13 to eight. Amazon planned to cut approximately 14,000 managerial roles by early 2025. Job postings for middle management positions have dropped 42% compared to April 2022, creating a dramatically different workplace structure.

This restructuring has fundamentally altered the manager-employee relationship. Where managers previously oversaw smaller teams, they now handle significantly larger groups. artificial intelligence cannot replace human connection in workplace relationships.

The trend reflects broader corporate priorities that [emphasise AI investment over human workforce development](https://www.sovereignmagazine.com/article/laying-off-humans-but-pouring-billions-of-dollars-into-ai-s-future). Organisations are betting that technology can compensate for reduced management oversight, despite evidence suggesting otherwise.

The flattening trend has created communication gaps that directly undermine employee engagement. Research shows that up to 70% of team engagement stems from manager relationships, making the reduction of middle management particularly damaging to workplace culture. Employees report losing access to career mentorship and development opportunities that traditionally came through manager relationships.

Gallup data reveals employee engagement declined for the first time in a decade, coinciding with widespread management cuts. Surviving managers face burnout as they struggle to provide adequate support to enlarged teams. [Younger employees particularly struggle with the loss of guidance](https://www.sovereignmagazine.com/article/future-workplace-crisis-looms-as-half-of-young-professionals-reject-management-roles) that shaped previous workplace experiences.

The impact extends beyond individual relationships. Companies report decreased employee morale despite achieving their efficiency goals. Workers describe feeling disconnected from leadership and unclear about career progression paths. [Employee wellbeing suffers when basic workplace support disappears](https://www.sovereignmagazine.com/article/just-listen-to-us-what-hourly-workers-say-really-improves-day-to-day-wellbeing-at-work), undermining the very employee experience that business leaders claim to prioritise.

[Laid-off middle managers are fighting for a shrinking pool of jobs](https://www.cnbc.com/2025/07/15/laid-off-managers-are-fighting-for-shrinking-pool-of-jobs.html) as the flattening trend accelerates across industries. The restructuring has created a fundamental mismatch between available management roles and qualified candidates seeking leadership positions.

Companies now face the challenge of balancing cost-cutting measures with human capital needs. Whilst [automated coaching tools offer some solutions](https://www.sovereignmagazine.com/article/human-resources-vs-automation-cost-cutting-leadership-tools-for-managers), they cannot replicate the human elements of leadership that drive employee engagement. Some organisations are experimenting with [restructured communication channels](https://www.sovereignmagazine.com/article/the-new-playbook-for-corporate-restructuring-lessons-from-starbucks-bold-overhaul) and redefined manager roles to address these gaps.

The recognition is growing that [employee experience requires human touch](https://www.sovereignmagazine.com/article/golden-handcuffs-at-nvidia-broadcom-and-amd-how-rsus-are-changing-managers-teams-and-hr-metri), not just operational efficiency. Business leaders increasingly acknowledge that people remain their most valuable asset, even as they pursue leaner organisational structures. As experts like [Dee Agarwal](https://www.streetinsider.com/Press+Releases/Dee+Agarwal+on+the+Importance+of+Employee+Experience/19563747.html) have emphasised, successful businesses recognise that their people are their lifeblood.

### Looking Forward

Corporate America’s rush to [flatten organisations](https://www.sovereignmagazine.com/article/corporate-america-s-great-restructuring-as-service-giants-are-slashing-costs-to-survive) may have achieved short-term cost savings, but it has created a fundamental disconnect between efficiency goals and employee experience reality. The challenge now lies in finding sustainable approaches that maintain operational efficiency whilst preserving the human connections that drive workplace engagement.

Companies that succeed in this balance will likely combine technology solutions with [reimagined management structures](https://www.sovereignmagazine.com/article/westpac-s-177m-restructuring-marks-new-era-for-australian-business-banking) that prioritise employee development and communication. Those that fail to address the human cost of flattening risk long-term damage to their workforce and culture. When employees struggle without proper management support, the entire organisation ultimately suffers the consequences.