Middle managers are the next target in corporate layoffs. In an earnings call, Meta CEO Mark Zuckerberg pointed out the proliferation of managers within the organization, claiming it creates unnecessary bloat and spiraling costs. According to reporting by the Verge, Meta is making 2023 the “year of efficiency,” which is a socially acceptable term for getting rid of highly paid managers that have built up large fiefdoms without adding value.
Zuckerberg called out the inefficiencies within the large social media platform, which is also happening at other large tech companies, stating, “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.”
In this new power dynamic shift, the tech sector is veering away from kowtowing to its highly compensated employees to cutting costs and appeasing shareholders and investors. The new model has won the approval of Wall Street, as the price of Meta’s stock price jumped 20% on the news of the social media company’s new austere, cost-cutting plan.
Everyone Wants To Be A Manager
Venture capitalist David Sacks said on the All-In podcast, a show for the tech, startup and VC community, that the mindset of workers shifted to everyone wanting to be a manager. According to Sacks, a software engineer no longer wants to be just a great individual contributor, but feels the way to succeed is by becoming a manager leading a large team. With this mindset, the top-gifted developer stops coding, which is what the person is great at, and becomes a manager. The coding star then builds a team.
Over time, the group escalates to five or 10-plus staff members. The once-rockstar software developer, instead of coding, spends the day managing the minutiae of the daily workflow. This trend is replicating throughout the organization, resulting in aggressive hiring of subordinates and substantially increasing the organization’s operating costs.
Sacks credits Twitter CEO Elon Musk with the start of a movement for tech executives to critically analyze the need for a large number of workers and initiate job cuts to reduce headcount and costs. Musk’s pushing out and firing of employees, as he took over the social media platform, was widely criticized for his harsh actions. However, in hindsight, it looks like his aggressive layoff tactics were emulated by other tech CEOs, as evidenced in the recent stream of downsizing announcements.
Meta and Twitter are not alone in going after middle managers. Chipmaker Intel announced that it is cutting pay across the board after Wall Street showed its displeasure with the company’s poor financial performance, causing its stock price to plunge. In response to investor pressure, Intel CEO Pat Gelsinger is accepting a 25% pay cut. The executive leadership team will take a 15% pay cut, and mid-level managers will lose 5% of their compensation.
Business Insider reported on a memo to Fedex’s employees by CEO Raj Subramaniam that stated, “Today we are in the process of informing a number of team members across our global enterprise that their positions have been eliminated as we reduce the size of our officer and director team by more than 10% and consolidate some teams and functions.”
The Difficult Work Life Of Managers
Middle managers don’t have it easy. They are viewed by many as the Michael Scott character on The Office. It’s a challenging role that is largely unappreciated. These professionals must deal with edicts from the C-suite and handle daily issues and crises from the rank-and-file workers.
It’s not just the tech sector. Many people feel that the way to succeed in their careers is to become a manager. What I’ve seen happen over the last 25 years at major corporations on Wall Street is that smart, motivated people want to quickly climb the corporate ladder to one day reach the C-suite. The challenge is that the talents that make someone a stellar employee may not cross over to being an effective manager.
For instance, in Major League Baseball, when all-star players retire from the sport, many become coaches and managers. Not everyone blossoms in the role. Just because they were talented home-run hitters and fielders doesn’t mean their skills will always transfer well. They may not have the temperament for managing the younger highly paid, big-ego players. Similarly, a star worker who excels at their profession may not have the tools, empathy, emotional intelligence and patience to lead a large group of workers.
In many instances, corporate leadership advances high performers to a managerial role, believing they’ll easily learn all the nuances of management and quickly succeed in their new capacity. Often, it’s taken as a given that the person will effortlessly glide into the new role without training or coaching.
The result could be disadvantageous, as the firm lost the productivity of a skilled professional who is now doing a poor job managing people. The staff becomes unhappy, as they bristle under the yoke of a bad, fault-finding manager who lacks compassion, empathy and the ability to delegate tasks and support the team.
It’s understandable for managers to feel unfulfilled or unhappy, as they are mired in unglamorous assignments, such as keeping track of vacation time, who is working remotely day to day and mediating ongoing feuds amongst co-workers. They are dragged into conducting job interviews, weighing in on candidates they are not familiar with and lacking the bandwidth to figure out if they’re the right fit. They need to put together budgets and hire and fire people. They get heat from both ends— the people above them in the corporate ranks and the staff.
BBC Worklife wrote about this dilemma, “In many cases, high-performing employees simply end up in supervisory roles as the default next step on the career ladder. Sometimes, they receive little training or organizational support for this promotion.” The middle managers take pressure from all sides within the firm, leaving them feeling “powerless” and “ill-equipped” to make everyone happy.
Source: Forbes
