Watch | Fate of middle managers in a world of cost-cuts 



About a decade ago, when I was taking a sabbatical from journalism and trying my hand at software delivery management, we came across a customer who had a limited budget. One of the first things he asked to be done was to knock off the project manager profile from the quotation to help him save costs. His point was “I am a technologist, your team is full of technologists. We will have daily calls on status. I will have a fair idea of what’s going on without the help of a manager. Don’t add to my costs.” 

Cut to 2024, that trend may only be picking up pace. 

In 2016, the Harvard Business Review published a now-popular piece titled “Excess Management Is Costing the U.S. $3 Trillion Per Year”.

Authors Gary Hamel and Michel Zanini argued that at that time, the average in American companies was one manager for 4.7 employees. They looked at the best-run companies and suggested that it should be possible to bring that ratio to one manager for 10 employees. At that time, it would have ‘freed up’ 12.5 million employees for other work that is more creative and productive, in the authors’ words. 

With the maturing of automation, machine learning and artificial intelligence technologies, a lot of the mundane tasks do not need human intervention any more. In 2020, Gartner predicted that 69% of all our tasks would be fully automated by 2024. Of course, they don’t have an update yet on whether that was achieved, so we will wait to see that follow-up.

Closer to our times, American logistics major UPS announced in January that it would cut 12,000 management jobs. Note the words, specifically, jobs to do with a management profile, out of its 85,000 workforce.

Citigroup, also in January, said it planned to cut 20,000 jobs after its worst quarterly results in a decade, but this announcement came only after a first round of job cuts targetted specifically at senior managers.

Increasingly, job cuts by American companies are targeting more and more of middle management roles. In the chart on your screens, data sourced by Bloomberg shows that over 5 years ended 2023, that percentage has grown from 19% to about 31%, while job losses among lower level staff have slipped from 74% to 53%.

An analysis by Morgan Stanley also points to mentions of “operational efficiency” in the US having hit the highest on record this earnings season. 

The Bloomberg report says the use of efficiency follows other euphemisms for laying off staff like streamlining and downsizing, but appears more pointed at middle managers because they have higher salaries and usually don’t contribute directly to a project by, for example, coding or making sales calls. 

In announcing his ‘Year of Efficiency’ in 2023, Meta’s Mark Zuckerberg was quoted by The Verge as saying in an all-hands meeting: “I don’t think you want a management structure that’s just managers managing managers, managing managers, managing managers, managing the people who are doing the work.”

Now, if you are a middle manager whose role is predominantly in co-ordinating, mentoring, managing, what should you do?

In an article for the California Management Review published by the University of California at Berkeley, lead author Prof Vijay Govindarajan says that you have to do one or more of three things:

First, you have been excellent worker. You were likely promoted to middle management for those skills. To help you fight what is called ‘Juniorisation’, go back from being a supervisor to being the expert worker that you once were, when you relied on your job expertise, critical thinking, and acute judgement. 

Don’t think of this proposition as a demotion. Think that you are becoming that expert worker again that you always enjoyed, and being someone who will always be in demand. 

The second thing you could do is to upskill. If you are a project manager in an IT firm but haven’t written code in years, time to rethink. Remember when the Agile methodology broke into popular consciousness a decade ago? The original proposition did even have a project manager role in the team. You had a product owner and a scrum master. The latter is the closest in profile to the project manager but that person wasn’t the manager. He or she was likely the best technical person in the team. 

Finally, lateralise. What the authors mean is for example, your industry expertise can help in identifying where automation or AI can provide the most value. If you are a retail store manager but you started your career at stocking the aisles, then you know what parts of the aisle keeper’s job is so mundane that AI can take over. 

In your own lines of work, you may have heard this refrain often ‘We have too many Generals and too few foot soldiers!” 

If you are not the chief of an organisation but still struggle to answer ‘What do you do in your office?”, then it’s time to rethink. 

Script and presentation: K. Bharat Kumar

Production: Shibu Narayan


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