Tech companies have laid off hundreds of thousands of workers, flattening their structure in a move critics say may backfire.
The biggest companies in tech have been laying off workers in an effort to cut costs and correct a trend of overhiring during the pandemic. Executives have called the measures “flattening,” designed to streamline operations.
According to Business Insider, companies realize the multi-layered approach to corporate structure needs to change.
“Companies are looking at efficiencies and they’re seeing that not only the layers, but also these kinds of inefficient, subjective performance structures are no longer needed,” said Anna Tavis, a professor with New York University’s school of professional studies. “There are some human roadblocks along the way because there needs to be a mindset change.”
Despite attempts to change their structure, companies may be trading short-term gains for long-term trouble.
“Good managers with strong team relationships can lead their teams to higher organizational performance, drive more effective organizational operations, and provide the link between organizational vision and execution,” a report from McKinsey said.
Tavis agrees, believing organizations have not fully counted the cost.
“The majority of organizations have not really thought this through, and a lot of times these decisions are made at top, thinking about efficiency, productivity, and I’ve got the data now,” Tavis said. “That’s how they’re thinking and they can do that, but I think there will be some challenges because it’s not thought through entirely.”
Only time will tell if tech companies’ choice pays off, but there’s certainly plenty of skepticism right off the bat.