A clear target emerges in tech layoffs: Middle managers
Published in Business News
As Meta Platforms Inc., Alphabet Inc. and other Silicon Valley behemoths look to lighten payrolls after years of feverish hiring, a clear target has emerged: the middle manager.
Meta will be cutting some layers of management, Chief Executive Officer Mark Zuckerberg said on the company’s earnings call last Wednesday, naming 2023 its “Year of Efficiency.” The company let go of over 11,000 workers last year, 13% of its workforce, in its first major layoff. This is “just the beginning,” said Susan Li, the company’s chief financial officer. The stock staged the biggest single-day rebound in nearly a decade after reporting revenue that beat expectations.
Recent layoffs at Alphabet, meanwhile, revealed a startling stat: Google employs more than 30,000 managers, according to remarks Fiona Cicconi, Google’s chief people officer, made to staff. The company eliminated 12,000 jobs this month, or 6% of its workforce.
At Intel Corp., managers’ pay will be slashed alongside top executives’ in an effort to shore up cash as the company faces intensifying competition and a plunge in demand for personal computers. While human resources experts agree that it’s the right move for executives to take a pay cut during turbulent economic times — from the perspective of shareholders and employees — the pain isn’t usually spread down the ranks.
Beyond tech, similar cuts are emerging. FedEx Corp. is reducing global officer and director jobs by more than 10% to make the company “more efficient, agile,” according to CEO Raj Subramaniam in a memo to employees.
The moves come as middle managers everywhere are under increasing pressure from both above — receiving missives from their bosses to do more with less — and below — enforcing return-to-office policies and navigating new hybrid work arrangements. A recent survey by Slack Technologies Inc.’s Future Forum found those in middle management are the most exhausted of all organizational levels. Some 43% said they’re burned out.
In techland, management is under particular seige. The conviction that the world’s top tech companies need little more than core engineering teams is perhaps embodied most fully by Elon Musk's “hardcore” Twitter 2.0. Since taking over, Musk gutted the company’s 7,000 staff. “Elon, what’s the one thing that’s most messed up at twitter right now??” Musk was asked on the platform in October. He replied: “There seem to be 10 people ‘managing’ for every one person coding.”
This narrative, of the inefficient bureaucracy and the “lean and mean” organization, has been around since the 1980s when General Electric Co.’s CEO Jack Welch and other business titans embraced downsizing and restructuring to stay competitive in the face of globalization and technological change. But studies have shown that for many companies, this reduction in force was temporary. The ranks (and paychecks) of middle managers swelled in the 1980s and 1990s, making many American corporations, as one economist put it, “fat and mean.”
At Google, management was once a bad word. In the company’s early days, the rule of thumb was that product and engineering teams would be overseen by directors with 25 to 30 reports, said Keval Desai, a former product management director who joined in 2003. Google sought to hire self-starters with an entrepreneurial spirit who could thrive in its flat organizational structure, he said.
“In a fast-moving industry where technology is evolving rapidly, where we have to be scrappy, we can’t afford for a group of people to do nothing but be human routers of information,” Desai said of Google’s rationale.
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