Dive Brief:

• Seventy-two percent of senior executives at U.S. companies feel stressed and stretched beyond their abilities as their companies, aiming to boost efficiency and streamline communication, lay off middle managers, Korn Ferry found in a survey.
• So-called organizational flattening can backfire, impeding communication and alignment across a company, reducing leadership support and productivity, and spurring turnover as top talent sees fewer paths to promotion and seeks jobs elsewhere, Korn Ferry said.
• “When management disappears, so does direction,” Korn Ferry Consulting CEO Lesley Uren said in a statement. “A leaner organization today can mean a leadership crisis tomorrow,” she said.

Dive Insight:

Economists at organizations as diverse as Moody’s, the U.N. and the Federal Reserve forecast that policy shifts by the Trump administration, including global tariffs, will slow U.S. economic growth this year. JPMorgan Chase sees 60% odds of a U.S. recession in 2025.

When confronting weaker demand, some companies may seek to safeguard profitability through either layoffs or cuts to payroll growth.

Already, 44% of U.S. employees report that their companies have sliced away managerial levels, Korn Ferry said, citing its survey of 15,000 workers in 10 countries including the U.S., U.K., France, Germany and Japan.

“Common assumptions about work are being rewritten in real time amid perpetual uncertainty and pressure points that are permeating the global workforce,” Uren said.

Although so-called delayering may improve organizational agility, 40% of U.S. employees say they feel a lack of direction because of reduced middle management, Korn Ferry said.

U.S. employees also find dissatisfaction from return-to-office mandates, with 69% preferring a hybrid arrangement that balances in-office and at-home work, Korn Ferry said.

Sixty-one percent of workers yearn for more flexibility from hybrid work and 60% see the benefit of better mental health, according to Korn Ferry.

At the same time, only 32% of U.S. employees have a so-called hybrid work option, “underscoring a growing disconnect between employer policies and employee needs,” Korn Ferry said.

Among other concerns, many workers feel a “generational angst,” Korn Ferry said. Three out of four workers in Generation Z, born between 1997 and 2012, feel challenges working with other generations because of differences in values, communications style or technological savvy, according to Korn Ferry.