A manager's salary is a legible cost. It sits on a spreadsheet, and cutting it produces an instant, provable saving. The coordination that manager was doing is not legible. It sits in scheduling, escalation, sense-making, and the constant small brokering of information between people who would otherwise stall. When the salary goes and the coordination does not, the company has not saved money. It has moved a cost from a place it could see to places it cannot.
This is the recurring failure mode of the great flattening. Deloitte reported that US employers advertised 42 percent fewer middle-management roles at the end of 2024 than in the spring of 2022 (Deloitte, 2025). Some of that reflects genuine redesign. A large share reflects the cheaper move: delete the box, keep the workload, and let it settle wherever it lands.
The coordinator you did not know you had
Look at what managers actually do before assuming the work is disposable. Deloitte's 2025 survey of nearly 10,000 leaders found managers spending close to 40 percent of their time on firefighting and administration, and only 13 percent developing their people (Deloitte, 2025). The reflex is to read that 40 percent as waste. Some is. But a good deal of firefighting is coordination under pressure: unblocking a stalled decision, catching a dropped handoff, translating between two functions that do not share a vocabulary. That is real work with a real output, even if the output is only that nothing broke.
Delete the role and the firefighting does not stop. It redistributes to whoever is nearest, usually the remaining managers and the senior individual contributors, who now hold a wider span with the same hours. The work is still done, just less well and by people who were hired to do something else. On the budget it looks like a saving. In the calendar it looks like everyone suddenly has less time to do the job they were actually measured on.
Where the cost resurfaces
Because the coordination is invisible, so is its new cost, at first. Then it surfaces as complexity. McKinsey's survey of more than 2,500 leaders found two-thirds already describing their organizations as overly complex and inefficient, and only half feeling prepared to react to external shocks (McKinsey, 2023). An organization that has scattered its coordination work does not get simpler. It gets a fog of half-owned tasks, slower decisions, and handoffs that fall through because no one is clearly responsible for catching them.
It also surfaces as disengagement, which is the most expensive form of the hidden cost. Gallup's 2025 data recorded manager engagement dropping from 27 percent to 22 percent in a single year, and put the productivity loss from global disengagement near 10 trillion dollars (Gallup, 2025). Load the survivors of a flattening with orphaned coordination on top of their existing jobs and you get exactly the burnout that number describes. The manager's salary came off the books. The cost reappeared, larger, as lost output nobody attributes to the cut that caused it.
The accounting trick works because the two costs live in different ledgers. The salary saving is booked immediately, precisely, and to the credit of whoever ordered the cut. The resulting friction is diffuse, delayed, and impossible to trace back to its cause. A decision that slips by two weeks, a handoff that fails once a quarter, a capable engineer who leaves because the job quietly doubled: none of these carry a label reading former manager's salary. That asymmetry is what makes subtraction so tempting and so misleading. The gain is legible and the loss is not, so the spreadsheet always flatters the cut. Only the calendar and the attrition report tell the fuller story, and they tell it late.
Redistribute on purpose or pay for it by accident
The alternative is not to keep every manager. It is to move the work deliberately rather than let it hide. Buurtzorg is the clearest example of a company that did the arithmetic. It runs more than 900 self-managing teams and roughly 14,700 staff with no middle managers, but the coordination did not evaporate. It was placed on purpose: inside the teams, which handle their own scheduling and hiring, and beside them in a back office of about 50 people and a group of coaches with no formal authority (Martela and Nandram, 2025). The layer was removed. The work was assigned.
That is the distinction every flattening decision turns on. A cut that names a new owner for each coordinating task is a redesign, and it can genuinely lower cost. A cut that names nothing is an accounting illusion, because the work leaves the org chart without leaving the organization. Ricardo Semler's argument for self-management was never that coordination is unnecessary. It was that it belongs with the people doing the work, held openly, rather than concentrated in a supervisor. The companies flattening well are following that logic. The ones flattening badly are discovering that the cheapest-looking cut is the one whose bill arrives last, from the direction they were not watching.
Sources
- Deloitte (2025). 2025 Global Human Capital Trends. US middle-management postings fell 42% and managers spend ~40% firefighting, showing the coordination work that persists after the role is cut. https://www.deloitte.com/us/en/insights/topics/talent/human-capital-trends/2025.html
- McKinsey (2023). The State of Organizations 2023. Two-thirds of leaders call their organizations overly complex and only half feel ready for shocks, where orphaned coordination resurfaces as cost. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-state-of-organizations-2023
- Gallup (2025). State of the Global Workplace 2025. Manager engagement fell to 22% and disengagement costs an estimated $10 trillion, the burnout bill from loading survivors with orphaned work. https://www.gallup.com/workplace/659610/state-global-workplace.aspx
- Martela and Nandram (2025). Buurtzorg: scaling up an organization with hundreds of self-managing teams but no middle managers. Buurtzorg removed the layer but reassigned coordination to teams, a back office of ~50, and authority-free coaches, the deliberate alternative to letting work hide. https://link.springer.com/article/10.1007/s41469-024-00184-y