The corporate world is in flux. With 120 companies announcing layoffs in May 2025 alone —and middle managers disproportionately impacted—organizations are racing to flatten hierarchies, slash costs, and embrace AI-driven efficiency (Forbes, 2025).
In recent years, Meta’s Mark Zuckerberg called out “managers managing managers” as relics of the past, while Citi reduced its management layers from 13 to 8. But as the dust settles, leaders face a critical question: How do we measure the real impact of these changes?
Spoiler: It’s not just about cost savings.
If you’re cutting middle management without tracking the right metrics, you’re flying blind—and risking productivity, innovation, and employee trust.
Let’s dive into the people analytics that separate strategic evolution from reckless restructuring.
📉 Why Metrics Matter: The High Stakes of Flattening Without Data
Flattening hierarchies isn’t inherently good or bad—it’s context-dependent. While AI promises efficiency, removing management layers can backfire if organizations ignore:
- Directionlessness: 40% of employees report uncertainty after manager layoffs (Korn Ferry).
- Bottlenecks: Fewer managers often mean wider spans of control, overwhelming remaining leaders.
- Disengagement: Gallup notes a 2% global engagement drop, costing $438B in lost productivity.
Without data, companies risk trading short-term savings for long-term chaos. Here’s what to measure instead.
🔍 3 Key Metrics to Track When Cutting Middle Management
1️⃣ Span of Control: Is Bigger Always Better?
- What it is: The number of direct reports per manager = Total Number of Employees ÷ Total Number of Managers
- Why it matters: Post-flattening, spans often balloon. While Meta’s Zuckerberg claims this reduces bureaucracy, research shows diminishing returns after 8-10 direct reports.
📊 The Data-Driven Sweet Spot:
- <8 direct reports: High-touch coaching but risk micromanagement.
- 8-12: Balance between oversight and autonomy.
- >12: Potential overload, burnout, and missed developmental opportunities.
2️⃣ Decision Latency: Speed vs. Quality
- What it is: The time between identifying a problem and implementing a solution.
- Why it matters: In fast-moving markets, days of delay can mean lost revenue and missed opportunities . Measuring decision latency reveals whether fewer layers actually translate into speed.
💡 How to Measure
- Identify key decisions (e.g., project approvals, product launches).
- Log timestamps when decision data arrives and when decisions are finalized.
- Compute average latency per process.
💡People Analytics Upgrade: Use workflow tools (e.g., Asana, Monday.com) to measure decision cycle times pre- and post-restructuring. Pair this with employee surveys to identify friction points.
Pro Tip: If latency rises, invest in upskilling employees to own decisions—or risk creating new bottlenecks.
3️⃣ Employee Engagement: The Silent Profit Killer
- What it is: Employees’ emotional commitment to organizational goals.
- Why it matters: As layoffs hit middle management, many organizations are training employees to lead themselves, forming self-directed teams that rely on clear goals and peer accountability rather than hierarchical oversight. The true metric of success here is employee engagement, not headcount—Gallup reports global engagement fell by 2 percentage points in 2024, costing the world economy an estimated $438 billion in lost productivity.
📊 Key Sub-Metrics
- eNPS (Employee Net Promoter Score): % Promoters − % Detractors
- Absenteeism Rate: Unplanned absence days per employee
- Retention Rate: % of employees staying beyond 12 months
Tracking Pre/Post
- Pulse surveys immediately before de-layering.
- Repeat surveys at 3- and 6-month intervals.
- Watch for eNPS drops >5 points, which signal morale risks.
💡 Metric Mashup: Combine engagement surveys with operational data (e.g., absenteeism, project completion rates). Spot trends like declining engagement in teams with the widest spans.
Remember: You can’t AI your way into human connection.
📌 Key Takeaways for Leaders
- Span of control ≠ productivity. Balance breadth with development opportunities.
- Speed isn’t agility. Measure decision quality, not just speed.
- Engagement is a leading indicator. Ignore it, and savings will evaporate.
📣 Over to You
Share Your Story: Comment below—have you seen flatter structures succeed or backfire?
Let’s discuss 👇
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