Remember that about 3-4 years ago, we experienced the Great Migration. The percentage of tech workers who moved to new companies was very high compared with historical migration patterns. Interests rates were still very low, companies had been buoyed by pandemic-related assistance, and inflation hadn't yet set in, so the salaries that were being offered were very attractive.
In the years since, the incentives to leave one's current employer have decreased. Salaries have stagnated, there's been belt tightening and layoffs, the pool of applicants competing for the same jobs has become bigger, and a lot of folks who've gotten cushy benefits like permanent WFH arrangements would have to go back to the office if they changed jobs.
But that means that a lot of tech companies are experiencing lower than normal attrition, but there's still professional growth happening, and the only way the companies have been able to reward employees is through promotions. That has led to bloat at the management layer, which this year many companies have tried to address, either by letting managers go or sending them back into IC roles.
I predict that due to "tenure lock" (where a lot of people who moved in the Great Migration have the same tenure at their current company) we're likely to hit a watershed moment that leads to another Great Migration later in the decade.
The Great Migration wasn't as real as the headlines made it look, though. It was an artifact of time-shifting from the pandemic. Normal job switching didn't happen in 2020 and became pent-up demand in 2021. So the numbers looked high for a short duration, but it wasn't really any fundamental shift, just the same activity pushed into a shorter time period. Look at the total numbers from 2019-2024 and I bet it's about the same as any five-year period.
Correct, the pandemic led to pent-up demand, and the Great Migration was what happened when job switching became tenable again. But the effects of that pent-up demand are a larger than normal group of people who now have the same relative tenure at their new organizations, and demand is building up again, as more and more people who've been with their company for 3+ years are looking for a change, but can't find one in the current hiring climate. So I predict we'll see a similar wave of large-scale job hopping once conditions become more favorable.
With regards to wfh, I’m of the opinion that a large amount of why wfh is nice is because the office now sucks. I am an academic scientist but let me offer my perspective.
I have three appointments, one at a software company, one at the university as a research scientist, and one at a university I am visiting.
At the company we have an open office plan. Most people don’t have assigned desks and often time people are working with customers. However we have a core r&d group but because it’s all open office basically everyone does their own thing because it’s disrupting to talk. Therefore I go to the office when I want to have lunch with colleagues but that’s about it. Nobody much complains about this arrangement because most everyone is working at the customers and those in the office are not typically there every day. Also the company pays for home office setup so everyone is happy to work from home some days.
At the university I’m visiting everyone, professors included, are crammed into tiny offices that are shared. Nobody has their own office. Nobody is even allowed to have their own white board you must share it with office mates and it must be regulation size with is only one meter wide. I was even told that the white board should only be used in collaboration that if I was using it for myself I should better use paper at my desk. You are not allowed to move or rearrange the office in any way. There is an industrial coffee machine that logs which coffee you take and reports through its 5g enabled internal computer. So far this coffee remains free. The management often complains about how people are not allowed to work from home yet there is only shared meeting space which can only be used if it’s booked through the online system and often it’s all booked. Even though the building seems busy with people most prefer to work from home or a coffee shop.
At the university I am a research scientist at I have my own office. It has a couch and a giant white board for discussing projects with phds and postdocs. There’s room for my textbooks and I have lots of desk space. When I work there it seems as if I’m working at 10x speed compared to anywhere else because all my resources are right there. There is a nice espresso machine, there is a nice culture of lunches and there’s a research centre lunch space. Everyone in the Research centre seems to show up to work every day and often seem happy to be there. Is rare that people work from home and often times even if there is crunch time they simply close their office door.
I guess what I’m trying to say is that it is possible that people would like to work from an office if that office was a nice place to be. It’s also possible that work from home is a great solution for lots of people. But I think that a great many people experience an office space that is onerous. And so given the option they would prefer to never be there.
I find this article doesn't really say much of substance nor does it have hard facts to back it its claims related to the title. It really is just an observation piece - there are cuts and here are some very general theories without evidence. I didn't really gain much reading it.
To begin with, the people who make and influence strategic decisions at companies--executives, boards, and major investors--are just as susceptible to fads as anybody else. The difference is that the fads they get into have massive impacts on people's lives. You rarely get fired for making a bad decisions everyone else is making at the same time. We see this in professional sports where playcallers will make decisions that are conventional but demonstrably suboptimal.
There are a lot of managers who are force multipliers for their teams. There are a lot that do crucial glue work but aren't gamechangers. There are a lot who are mediocre. There are some that are counterproductive. It is very difficult to tell the difference between these. Even if you have lots of time, it is hard to isolate the work of the manager from the circumstances they're in. One way to find out is to get rid of the managers and see which initiatives suffer.
I'm guessing we'll see the number of managers gradually converge to whatever the long-term average, unless the nature of white collar work has changed. On case-by-case bases, teams that are hamstrung by insufficient management will demand more management. They'll get it, especially if they are doing critical work. Other teams will regain management due to the desire for consistency.
Actually my manager was "demoted" back to a programmer, which I think is a good thing. He was forced onto management a few years ago, but that was a waste of talent in my opinion. I also think a lot of stress he suffered as a manager is gone.
But yes, a lot of people were let go at the same time (8 months ago).
And the article, no useful information from what I can see.
One of the big things that keeps me where I'm working now is the org structure that keeps managers & non-managers on separate career tracks until significantly higher in the org chart than most big companies. Moving between manager & not isn't a promotion or demotion; it's a sideways shift.
As long as it's a demotion with a pay raise and a more senior sounding title like "staff engineer" then I think most technical managers would jump at the opportunity. The narrative drastically affects the perception.
Having too many also causes endless politics, empire building, meetings, etc, etc. Much more expensive than too few. They need to justify their existence somehow and since they can't directly drive features and you can only optimize a team so much that eventually ends in bureaucratic hell.
In the past maybe. Now that all managers are 'working managers' and treated as a manager and an addition human work unit I'm not so sure. Corporations don't normally replaced the fired manager with an additional human work unit and just expect the team to absorb one more HWU worth of work with the smaller headcount.
The organizational / social capital starts decreasing and then a few quarters later people see the costs of not having enough organizational capital. Boom/bust.
Management monopolizing organizational / social capital is itself a sign of a fairly unhealthy organization. So you might get a couple quarters of pain but then you'll end up with a better long term organization.
This reads as if the required amount of management for different initiatives is constant, but it isn't.
One thing that happens is that when money is plentiful, there is a push to find new ways to generate returns. When money is tight, new bets look bad, and companies may cut new bets and work on optimizing their existing cash-cows.
Strictly, that says nothing about the number of managers needed, but I do think it's less management intensive to keep on with what you're already doing.
It's not optical, it's just bad. The risk adjusted returns for bets need to cross the interest rate threshold and when rates are high, the number of bets you can take must drop.
This is insightful and mirrors my understanding of corporations. New bets are too risky but existing bets need to be maintained for the sake of customers.
Thus, new managers are not necessary as new teams are not necessary. Folding teams together also starts making sense. Fewer layers also starts making sense.
Ultimately, management is overhead and administrative. Less important than individuals who are actually building, maintaining, advertising, and selling.
Comments so far seem to fail to recognize that this post is a "response" to the WSJ article linked at the very beginning and isn't a standalone piece by itself.
I read this blog post as "thinking out loud on the internet". It's something I see done quite a bit in the econ blogosphere. Sometimes a post like this will prompt responses from other econ bloggers (Greg Mankiw, Tyler Cowen, etc.). Sometimes not. It's not meant to be an essay.
> U.S. public companies have cut their middle-manager head counts by about 6% since the peak of their pandemic hiring sprees
Haven't there been pretty big, well-known layoffs in other areas as well in the last couple years? Lots of engineers have gotten laid off, and the article also points out a 6% reduction in HR. Might it be that they're just laying everybody off across the board? I'd love it if this article considered management layoffs compared to the base rate of layoffs.
I'm a designer, and what I tell people is that you can't avoid having a designer on your team: if you don't have a dedicated designer, design is going to get done by everybody else. Probably by people who don't want to do it, aren't good at it, or may not even know they're doing it as they make unconsidered choices that shape your product forever. I think the same is probably true with managers. You hypothesize: ahh, managers are probably dead weight, let's get rid of them to save money. But then it turns out that all the individual contributors have to split the work the managers used to do. Or, more likely, your lead IC has to do it along with their main job. And in most cases they are not good at it, and do a poor job, and when it nets out you've got a less productive team. My manager quit a year ago, they didn't backfill for his position, and it's been an utter shitshow ever since.
Is head count the right metric anymore? For all the talk of the LLM impact on programming, LLMs are even better at doing managerial tasks. The managers may no longer have heads.
Because middle management is a self-perpetuation and completely useless caste at best, maliciously incompetent is usually what I observe in their ranks. Cutting the vapid, self-important, ignorant and lazy middle management is probably the best idea any company could have. Fire everyone who does not do any real work, then hire qualified personnel where organizational prowess is really needed.
Because there was general layoffs of the workers in the previous year or two? There is a fairly formulaic way that companies tighten belts. First you do layoffs, get rid of projects that will never make money, reduce headcount for orgs that grew fat, etc. At the same time you explore offshoring (especially as it keeps the same number of headcount under a vp for less cost). Then there is a round of cleaning up the management layer, making sure everyone has a minimum number of reports, moving some managers back to being leads/IC etc.
This was all formulaic and the more experienced directors and VP's back in 2022 knew this and immediately started playing the new corporate game to win in the long run.
"On the same WSJ front page that the story of management cutbacks appeared, there was also a story about the stock market having risen unusually fast the last two years. Perhaps these stories are connected"
This is all over news but is this actually true. Meta is always citied as example because Mark said and did bunch of things to appease the markets.
There are no reduction in numbers at meta now. Middle managers have made a comeback at meta big time. CEOs love middle managers despite what they say to investors.
Even the numbers cited in the article are not convincing
> middle-manager head counts by about 6% since the peak of their pandemic hiring sprees
This actually indicates the opposite that middle managment is unusually resilient to layoffs
Exactly. Not having political battlegrounds makes companies better. Whereas, it sounds like you're saying having people to fight in the battleground is the goal.
I think what the previous post meant was that a political battleground always exists, not that middle managers create them. If you think they don't, you're telling me your role in the organization without telling me your role.
I just always assumed middle management purpose is to insulate upper management from any bad consequences of the actual business.
Like there is a dispersion process of responsibility of the actual business as you go up the chain so if you have enough layers you can basically free roll as an upper manager with taking credit for the good outcomes while the bad was just shitty middle management.
It is an investment by upper manager to free roll.
The same reason sports teams fire their head coach (or manager) when the owners want a change - because it is easy to replace one manager than an entire team.
"Of course they want to bring in Indians and Artificial Intelligence. Why would they want to pay a US citizen $100,000 a year or whatever the commensurate salary is for your job."
A number of corporations are going to learn hard lessons from indiscriminate cutting of middle management, like when Google thought they were being innovative in not having much management a long time ago.
I think as with everything, it depends on what end of the spectrum your company is at.
There are a lot companies, Volkswagen to name a prominent example, that have over time built up massive management layers that don't ultimately serve the company goals.
Getting rid of excess is something that is necessary because they have ballooned to expensive and unhealthy proportions.
Having none at all or too little obviously also has downsides.
Manufacturing is all about management though, isn't it? Management is the make or break in that industry. Sure you can coast with your current setup, but that isn't enough for an auto company long term.
You need to manage your PLM (product life cycle CAD/design software) integrated to your EBOM (engineering bill of materials) to your MBOM (manufacturing bill of materials) to support your ERP (enterprise resource planning) in support of your MRP (manufacturing resource planning). All of that requires people at higher levels that understand the systems at the conceptual level and the company specific level, working together to make sure that 40,000 parts manufactured in house and purchased externally, all with varying lead times, come together at the exact right time to build the correct model/configuration for the market right now.
I've seen plenty of companies making bank today but that were doomed because they no longer did any of the above, they fired management, they outsourced design, they outsourced IT, they coasted on prior managers work in setting/configuring everything and it all became fixed in place as is. Best they could hope for was to bring in consultants to heavy lift changes as part of 'major' efforts going forward, allowing what managers would have been continually adapting to pill up until it became such a big issue money was freed up for the consultants.
Again, that's generally fine and correct, but when you have 2 separate departments that do almost the identical job, it's time to question whether or not that 2nd department is needed.
My argument wasn't that most management wasn't necessary. Especially for something as complex as modern cars, there is a need for organizing and managing the whole process correctly. What companies like VW suffer from is too much management.
I've worked for one of their sub-brands. It was not a rare sight to see that there were individual contributors that had more than 1 manager while working on a single project. It made no sense from any conceivable standpoint. The movie Office Space comes to mind.
The main problem I saw while working there was that to be considered successful, and get corresponding salary adjustments and promotions, managers increased their head count by any means necessary. That included hiring and promoting more managers who's sole goal was to increase it even further. There came a point where my team had 3 managers at once, all on a different career level, but all responsible for only my team.
Division Lead (responsible only for Team X) -> Sub-division Lead (responsible only for Team X) -> Team Lead (responsible only for Team X) -> Team X.
That structure made no sense.
I see what you are saying. Companies where managers build kingdoms for zero business reason are pretty bad, especially when you are a manager that doesn't play those sorts of games.
Was your project seen as quasi make or break? I've been places where that structure made sense in that context. Division lead is mainly full time liason to the board in order to keep them comfortable with the project, sales planning, forecasts, etc. There's a lot of invisible at the team level stuff that can go on up there. Subdivision lead is to smooth the projects interactions/needs with other functional areas of the company, and team lead to actually keep the project on track internally.
I saw things from the other side but just from site visits. We implemented the same software and our management actually invested in our staff and flew us all over to see how others implemented things/their processes/etc.
Did site visits to an auto company where they had outsourced everything to TATA. At this point there is zero reason that brand exists, it doesn't bring anything over anyone else, not much institutional knowledge (or care for that matter) and basically treating their business like a franchise where any old body could step in, and not a specialized institution where the employees actually added/had internal value.
One McDonalds franchise is the same as the next, but seeing your auto company that way you are dead long term.
Our project wasn't all that important in the grand scheme of things. Certainly not enough to justify 3 managers for it. I remember carefully asking my team manager why the structure was the way it was and her answer was to simply shrug her shoulders.
I see your point about keeping all level of stakeholders aligned and interested in the project. Considering our project size though, and the fact that it was considered a permanent development project anyway, I don't see a reason why the managers should only be responsible for a single team. They had plenty of time to take over that stakeholder management for multiple teams.
I'm currently working for a very large company that went through a very public decimation of management. My CEO is busy writing op-eds about how effective things have been.
Internally, we're adrift. If everyone is in charge, nobody is. And the CEO didn't think about how yearly reviews or promotions were going to work without managers to read or write them.
Remember that about 3-4 years ago, we experienced the Great Migration. The percentage of tech workers who moved to new companies was very high compared with historical migration patterns. Interests rates were still very low, companies had been buoyed by pandemic-related assistance, and inflation hadn't yet set in, so the salaries that were being offered were very attractive.
In the years since, the incentives to leave one's current employer have decreased. Salaries have stagnated, there's been belt tightening and layoffs, the pool of applicants competing for the same jobs has become bigger, and a lot of folks who've gotten cushy benefits like permanent WFH arrangements would have to go back to the office if they changed jobs.
But that means that a lot of tech companies are experiencing lower than normal attrition, but there's still professional growth happening, and the only way the companies have been able to reward employees is through promotions. That has led to bloat at the management layer, which this year many companies have tried to address, either by letting managers go or sending them back into IC roles.
I predict that due to "tenure lock" (where a lot of people who moved in the Great Migration have the same tenure at their current company) we're likely to hit a watershed moment that leads to another Great Migration later in the decade.
The Great Migration wasn't as real as the headlines made it look, though. It was an artifact of time-shifting from the pandemic. Normal job switching didn't happen in 2020 and became pent-up demand in 2021. So the numbers looked high for a short duration, but it wasn't really any fundamental shift, just the same activity pushed into a shorter time period. Look at the total numbers from 2019-2024 and I bet it's about the same as any five-year period.
Correct, the pandemic led to pent-up demand, and the Great Migration was what happened when job switching became tenable again. But the effects of that pent-up demand are a larger than normal group of people who now have the same relative tenure at their new organizations, and demand is building up again, as more and more people who've been with their company for 3+ years are looking for a change, but can't find one in the current hiring climate. So I predict we'll see a similar wave of large-scale job hopping once conditions become more favorable.
With regards to wfh, I’m of the opinion that a large amount of why wfh is nice is because the office now sucks. I am an academic scientist but let me offer my perspective.
I have three appointments, one at a software company, one at the university as a research scientist, and one at a university I am visiting.
At the company we have an open office plan. Most people don’t have assigned desks and often time people are working with customers. However we have a core r&d group but because it’s all open office basically everyone does their own thing because it’s disrupting to talk. Therefore I go to the office when I want to have lunch with colleagues but that’s about it. Nobody much complains about this arrangement because most everyone is working at the customers and those in the office are not typically there every day. Also the company pays for home office setup so everyone is happy to work from home some days.
At the university I’m visiting everyone, professors included, are crammed into tiny offices that are shared. Nobody has their own office. Nobody is even allowed to have their own white board you must share it with office mates and it must be regulation size with is only one meter wide. I was even told that the white board should only be used in collaboration that if I was using it for myself I should better use paper at my desk. You are not allowed to move or rearrange the office in any way. There is an industrial coffee machine that logs which coffee you take and reports through its 5g enabled internal computer. So far this coffee remains free. The management often complains about how people are not allowed to work from home yet there is only shared meeting space which can only be used if it’s booked through the online system and often it’s all booked. Even though the building seems busy with people most prefer to work from home or a coffee shop.
At the university I am a research scientist at I have my own office. It has a couch and a giant white board for discussing projects with phds and postdocs. There’s room for my textbooks and I have lots of desk space. When I work there it seems as if I’m working at 10x speed compared to anywhere else because all my resources are right there. There is a nice espresso machine, there is a nice culture of lunches and there’s a research centre lunch space. Everyone in the Research centre seems to show up to work every day and often seem happy to be there. Is rare that people work from home and often times even if there is crunch time they simply close their office door.
I guess what I’m trying to say is that it is possible that people would like to work from an office if that office was a nice place to be. It’s also possible that work from home is a great solution for lots of people. But I think that a great many people experience an office space that is onerous. And so given the option they would prefer to never be there.
Just FYI, none of this is new - offices have been that way for most of the 21st century.
i too am a command line fan.
I find this article doesn't really say much of substance nor does it have hard facts to back it its claims related to the title. It really is just an observation piece - there are cuts and here are some very general theories without evidence. I didn't really gain much reading it.
https://news.ycombinator.com/item?id=42611851
To begin with, the people who make and influence strategic decisions at companies--executives, boards, and major investors--are just as susceptible to fads as anybody else. The difference is that the fads they get into have massive impacts on people's lives. You rarely get fired for making a bad decisions everyone else is making at the same time. We see this in professional sports where playcallers will make decisions that are conventional but demonstrably suboptimal.
There are a lot of managers who are force multipliers for their teams. There are a lot that do crucial glue work but aren't gamechangers. There are a lot who are mediocre. There are some that are counterproductive. It is very difficult to tell the difference between these. Even if you have lots of time, it is hard to isolate the work of the manager from the circumstances they're in. One way to find out is to get rid of the managers and see which initiatives suffer.
I'm guessing we'll see the number of managers gradually converge to whatever the long-term average, unless the nature of white collar work has changed. On case-by-case bases, teams that are hamstrung by insufficient management will demand more management. They'll get it, especially if they are doing critical work. Other teams will regain management due to the desire for consistency.
Corporations cut managers because they're expensive. Not having enough managers is also expensive though.
Actually my manager was "demoted" back to a programmer, which I think is a good thing. He was forced onto management a few years ago, but that was a waste of talent in my opinion. I also think a lot of stress he suffered as a manager is gone.
But yes, a lot of people were let go at the same time (8 months ago).
And the article, no useful information from what I can see.
One of the big things that keeps me where I'm working now is the org structure that keeps managers & non-managers on separate career tracks until significantly higher in the org chart than most big companies. Moving between manager & not isn't a promotion or demotion; it's a sideways shift.
I hope everybody sees it that way (having been "demoted" to programmer a couple times in my career myself) but I fear that not everybody does.
As long as it's a demotion with a pay raise and a more senior sounding title like "staff engineer" then I think most technical managers would jump at the opportunity. The narrative drastically affects the perception.
Having too many also causes endless politics, empire building, meetings, etc, etc. Much more expensive than too few. They need to justify their existence somehow and since they can't directly drive features and you can only optimize a team so much that eventually ends in bureaucratic hell.
In the past maybe. Now that all managers are 'working managers' and treated as a manager and an addition human work unit I'm not so sure. Corporations don't normally replaced the fired manager with an additional human work unit and just expect the team to absorb one more HWU worth of work with the smaller headcount.
That part usually takes a couple quarters to show up though. :(
The organizational / social capital starts decreasing and then a few quarters later people see the costs of not having enough organizational capital. Boom/bust.
Management monopolizing organizational / social capital is itself a sign of a fairly unhealthy organization. So you might get a couple quarters of pain but then you'll end up with a better long term organization.
Ah, optimism. Not impossible, but rarely actually works out that way.
This reads as if the required amount of management for different initiatives is constant, but it isn't.
One thing that happens is that when money is plentiful, there is a push to find new ways to generate returns. When money is tight, new bets look bad, and companies may cut new bets and work on optimizing their existing cash-cows.
Strictly, that says nothing about the number of managers needed, but I do think it's less management intensive to keep on with what you're already doing.
> When money is tight, new bets look bad
It's not optical, it's just bad. The risk adjusted returns for bets need to cross the interest rate threshold and when rates are high, the number of bets you can take must drop.
This is insightful and mirrors my understanding of corporations. New bets are too risky but existing bets need to be maintained for the sake of customers.
Thus, new managers are not necessary as new teams are not necessary. Folding teams together also starts making sense. Fewer layers also starts making sense.
Ultimately, management is overhead and administrative. Less important than individuals who are actually building, maintaining, advertising, and selling.
[dead]
Comments so far seem to fail to recognize that this post is a "response" to the WSJ article linked at the very beginning and isn't a standalone piece by itself.
Here's the WSJ piece for folks without a subscription: https://archive.is/SwWn6
Not terribly insightful. The question in the headline is not answered.
It wasn’t mean to.
The entire last paragraph was a bunch of questions meant to invoke discussions and theories.
It has no ads, the author is already a well known economist and has nothing to prove for trying to be a “thought leader”.
Was it written by an AI?
Arnold Kling is a fairly well known academic. https://en.wikipedia.org/wiki/Arnold_Kling
I read this blog post as "thinking out loud on the internet". It's something I see done quite a bit in the econ blogosphere. Sometimes a post like this will prompt responses from other econ bloggers (Greg Mankiw, Tyler Cowen, etc.). Sometimes not. It's not meant to be an essay.
> U.S. public companies have cut their middle-manager head counts by about 6% since the peak of their pandemic hiring sprees
Haven't there been pretty big, well-known layoffs in other areas as well in the last couple years? Lots of engineers have gotten laid off, and the article also points out a 6% reduction in HR. Might it be that they're just laying everybody off across the board? I'd love it if this article considered management layoffs compared to the base rate of layoffs.
I'm a designer, and what I tell people is that you can't avoid having a designer on your team: if you don't have a dedicated designer, design is going to get done by everybody else. Probably by people who don't want to do it, aren't good at it, or may not even know they're doing it as they make unconsidered choices that shape your product forever. I think the same is probably true with managers. You hypothesize: ahh, managers are probably dead weight, let's get rid of them to save money. But then it turns out that all the individual contributors have to split the work the managers used to do. Or, more likely, your lead IC has to do it along with their main job. And in most cases they are not good at it, and do a poor job, and when it nets out you've got a less productive team. My manager quit a year ago, they didn't backfill for his position, and it's been an utter shitshow ever since.
Is head count the right metric anymore? For all the talk of the LLM impact on programming, LLMs are even better at doing managerial tasks. The managers may no longer have heads.
Because middle management is a self-perpetuation and completely useless caste at best, maliciously incompetent is usually what I observe in their ranks. Cutting the vapid, self-important, ignorant and lazy middle management is probably the best idea any company could have. Fire everyone who does not do any real work, then hire qualified personnel where organizational prowess is really needed.
"Perhaps what happened in recent years is that senior executives could not see how to boost revenues quickly enough to satisfy shareholders."
And there we have it.
Because there was general layoffs of the workers in the previous year or two? There is a fairly formulaic way that companies tighten belts. First you do layoffs, get rid of projects that will never make money, reduce headcount for orgs that grew fat, etc. At the same time you explore offshoring (especially as it keeps the same number of headcount under a vp for less cost). Then there is a round of cleaning up the management layer, making sure everyone has a minimum number of reports, moving some managers back to being leads/IC etc.
This was all formulaic and the more experienced directors and VP's back in 2022 knew this and immediately started playing the new corporate game to win in the long run.
Lots of bad faith in this article. Example:
"On the same WSJ front page that the story of management cutbacks appeared, there was also a story about the stock market having risen unusually fast the last two years. Perhaps these stories are connected"
Does it take fewer managers to manage remote employees?
Do the tools that help manage projects with remote employees reduce the number of managers needed?
This is all over news but is this actually true. Meta is always citied as example because Mark said and did bunch of things to appease the markets.
There are no reduction in numbers at meta now. Middle managers have made a comeback at meta big time. CEOs love middle managers despite what they say to investors.
Even the numbers cited in the article are not convincing
> middle-manager head counts by about 6% since the peak of their pandemic hiring sprees
This actually indicates the opposite that middle managment is unusually resilient to layoffs
Why would Mark care about appeasing the market? He has a controlling interest in Meta and can’t be fired no matter what the market thinks.
You can accuse Meta of a lot of things. But being short term focused is not one.
> Why would Mark care about appeasing the market?
you mean he doesn't care what the meta stock price is ?
then I don't have a theory why mark claimed to cut middle management in 'year of efficiency' but didn't actually do it.
I can’t find numbers for 2024. But as of the end of 2023, they still have more employees than they did in 2020.
https://www.statista.com/statistics/273563/number-of-faceboo...
Middle management gets a bad rap but that political battleground makes or break companies.
Exactly. Not having political battlegrounds makes companies better. Whereas, it sounds like you're saying having people to fight in the battleground is the goal.
I think what the previous post meant was that a political battleground always exists, not that middle managers create them. If you think they don't, you're telling me your role in the organization without telling me your role.
I just always assumed middle management purpose is to insulate upper management from any bad consequences of the actual business.
Like there is a dispersion process of responsibility of the actual business as you go up the chain so if you have enough layers you can basically free roll as an upper manager with taking credit for the good outcomes while the bad was just shitty middle management.
It is an investment by upper manager to free roll.
battleground is another name for markets
Those battles will always exist and need to be fought.
The same reason sports teams fire their head coach (or manager) when the owners want a change - because it is easy to replace one manager than an entire team.
new manager then can slowly fire and hire according to new goals.
Part of the problem:
https://47cleanupcrew.com/
"Of course they want to bring in Indians and Artificial Intelligence. Why would they want to pay a US citizen $100,000 a year or whatever the commensurate salary is for your job."
A number of corporations are going to learn hard lessons from indiscriminate cutting of middle management, like when Google thought they were being innovative in not having much management a long time ago.
I think as with everything, it depends on what end of the spectrum your company is at.
There are a lot companies, Volkswagen to name a prominent example, that have over time built up massive management layers that don't ultimately serve the company goals.
Getting rid of excess is something that is necessary because they have ballooned to expensive and unhealthy proportions.
Having none at all or too little obviously also has downsides.
Manufacturing is all about management though, isn't it? Management is the make or break in that industry. Sure you can coast with your current setup, but that isn't enough for an auto company long term.
You need to manage your PLM (product life cycle CAD/design software) integrated to your EBOM (engineering bill of materials) to your MBOM (manufacturing bill of materials) to support your ERP (enterprise resource planning) in support of your MRP (manufacturing resource planning). All of that requires people at higher levels that understand the systems at the conceptual level and the company specific level, working together to make sure that 40,000 parts manufactured in house and purchased externally, all with varying lead times, come together at the exact right time to build the correct model/configuration for the market right now.
I've seen plenty of companies making bank today but that were doomed because they no longer did any of the above, they fired management, they outsourced design, they outsourced IT, they coasted on prior managers work in setting/configuring everything and it all became fixed in place as is. Best they could hope for was to bring in consultants to heavy lift changes as part of 'major' efforts going forward, allowing what managers would have been continually adapting to pill up until it became such a big issue money was freed up for the consultants.
Again, that's generally fine and correct, but when you have 2 separate departments that do almost the identical job, it's time to question whether or not that 2nd department is needed.
My argument wasn't that most management wasn't necessary. Especially for something as complex as modern cars, there is a need for organizing and managing the whole process correctly. What companies like VW suffer from is too much management.
I've worked for one of their sub-brands. It was not a rare sight to see that there were individual contributors that had more than 1 manager while working on a single project. It made no sense from any conceivable standpoint. The movie Office Space comes to mind.
The main problem I saw while working there was that to be considered successful, and get corresponding salary adjustments and promotions, managers increased their head count by any means necessary. That included hiring and promoting more managers who's sole goal was to increase it even further. There came a point where my team had 3 managers at once, all on a different career level, but all responsible for only my team. Division Lead (responsible only for Team X) -> Sub-division Lead (responsible only for Team X) -> Team Lead (responsible only for Team X) -> Team X. That structure made no sense.
I see what you are saying. Companies where managers build kingdoms for zero business reason are pretty bad, especially when you are a manager that doesn't play those sorts of games.
Was your project seen as quasi make or break? I've been places where that structure made sense in that context. Division lead is mainly full time liason to the board in order to keep them comfortable with the project, sales planning, forecasts, etc. There's a lot of invisible at the team level stuff that can go on up there. Subdivision lead is to smooth the projects interactions/needs with other functional areas of the company, and team lead to actually keep the project on track internally.
I saw things from the other side but just from site visits. We implemented the same software and our management actually invested in our staff and flew us all over to see how others implemented things/their processes/etc.
Did site visits to an auto company where they had outsourced everything to TATA. At this point there is zero reason that brand exists, it doesn't bring anything over anyone else, not much institutional knowledge (or care for that matter) and basically treating their business like a franchise where any old body could step in, and not a specialized institution where the employees actually added/had internal value.
One McDonalds franchise is the same as the next, but seeing your auto company that way you are dead long term.
Our project wasn't all that important in the grand scheme of things. Certainly not enough to justify 3 managers for it. I remember carefully asking my team manager why the structure was the way it was and her answer was to simply shrug her shoulders.
I see your point about keeping all level of stakeholders aligned and interested in the project. Considering our project size though, and the fact that it was considered a permanent development project anyway, I don't see a reason why the managers should only be responsible for a single team. They had plenty of time to take over that stakeholder management for multiple teams.
I'm currently working for a very large company that went through a very public decimation of management. My CEO is busy writing op-eds about how effective things have been.
Internally, we're adrift. If everyone is in charge, nobody is. And the CEO didn't think about how yearly reviews or promotions were going to work without managers to read or write them.
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