By CEO Today Editorial
Two decisions are being made in corner offices right now that look, on paper, unrelated. In Seattle and Redmond, chief executives are cutting managers: Amazon eliminated roughly 14,000 corporate roles in a single sweep in late 2025, Andy Jassy told his organisation to widen the ratio of individual contributors to managers by at least 15 percent, and Microsoft has trimmed thousands of positions even as it keeps well over 300 chiefs of staff on payroll. In Mumbai, Bengaluru and Pune, chief executives are cutting freshers: Tata Consultancy Services closed its last financial year with roughly 23,000 fewer employees than it started with, nearly double the reduction it had announced, and Wipro has quietly throttled its campus-hiring guidance while some recruits already selected have waited more than seven months just to be onboarded.
Read separately, these are two stories about efficiency. Read together, they are the same story, arriving from opposite ends of the organisational pyramid, and it is not really a story about cost at all. It is a story about where the next generation of operating leaders is supposed to come from, and both halves of the world are, for different reasons, cutting off the supply.
The middle is being amputated in the name of AI
The Western version of this is now well documented. Gartner told corporate planners in late 2024 that one in five organisations would use AI to eliminate more than half their middle-management layer by the end of 2026, and the layoffs since have tracked close to that script. Roughly four in ten employees globally now say their employer has cut a layer of management, according to workforce research from Korn Ferry covering more than 15,000 professionals, and the human residue of that decision is visible in the same data: over a third of respondents said they felt directionless after the restructuring, and nearly half of surviving senior leaders admitted they were not confident they could absorb the workload that had landed on them. Gallup’s employee-engagement tracking shows manager engagement scores falling from 31 percent in 2022 to 22 percent in 2025, a decline concentrated in the last eighteen months, alongside a span of control that has crept up from under 11 direct reports to just over 12, nearly 50 percent wider than it was a decade ago.
None of this is necessarily irrational on its own terms. A layer of coordination that existed mainly to shuttle status updates between individual contributors and executives is a reasonable casualty of tools that can now summarise, route and flag that information automatically. The trouble is what boards are being told the savings represent, versus what is actually happening to the cost. At Microsoft, a company that cut some 15,000 roles across 2025, the chief-of-staff population it maintains alongside those cuts is estimated to cost in excess of $55 million a year in base salary alone, before bonus and equity. Postings for chief-of-staff roles have roughly doubled globally in the past year and have nearly tripled among North American professionals since 2021, and the position now commands a meaningful premium over the general manager role it is quietly absorbing. The coordination work that middle managers used to do has not disappeared. It has been re-priced and moved two rungs up the org chart, where it is more expensive per unit and answerable to far fewer people.
India is cutting from the other end, and calling it something else
The Indian story looks, superficially, like a different phenomenon entirely, because the people losing their jobs are not managers at all. They are freshers, and the industry doing the cutting has spent three decades built on hiring them by the tens of thousands. TCS ending FY26 with more than 23,000 fewer employees than it started with (against a stated target of roughly 12,000) and Wipro squeezing its campus intake down to 7,500–8,000 recruits is not, on the surface, a leadership story. It reads as an entry-level jobs story, and it is being covered as one.
But the entry-level cohort in Indian IT services was never just cheap labour. It was the farm system. The project leads, delivery managers and unit heads running Indian technology services a decade from now were supposed to be recruited, in large part, from precisely the cohort that is now being told there is no seat at the base of the pyramid. The industry’s founding economics, revenue as a function of people multiplied by hours multiplied by billing rate, is breaking because AI-assisted delivery now needs measurably fewer billable juniors to produce the same output; several Indian IT leaders have already begun telling investors that revenue per employee, not headcount growth, is the metric that matters now. That is a defensible response to a genuine productivity shift. What it does not have is an answer to where the delivery managers of 2034 are meant to come from, if the pipeline that used to manufacture them a decade in advance is the first thing being switched off.
Same mistake, opposite ends, no shared ledger
What connects Seattle’s management purge to Bengaluru’s fresher freeze is not the cause, which differs, but the accounting. Both are being booked as pure efficiency gains, because no organisation currently carries “leadership pipeline depth” as a line item anywhere a board would notice its depletion. A company can report record margins for three straight years while quietly running down the one asset that has no ticker, no quarterly disclosure and no analyst asking about it on the earnings call, and the bill for that arrives on a lag long enough that the executives who booked the saving are rarely the ones who have to pay it. Fortune’s reporting on this pattern includes an instructive pair of cases: a technology company that cut 70 percent of its engineering-management layer in 2024 to save $3.2 million found its VP-level survivors managing 47 direct reports each, and lost its most capable senior engineer, who said plainly that nobody left in the structure understood what he was working on or why it mattered; a logistics company that eliminated 65 percent of regional manager roles to save $2.3 million later ran two failed external searches because it could not produce a single internal candidate qualified to run a region. Separately, research cited from DDI finds around 40 percent of existing leaders are actively weighing whether to leave their roles at all, and Deloitte’s research on next-generation talent finds only about 6 percent of Gen Z employees want a senior leadership job in the first place, which should worry any board relying on organic promotion to eventually refill what is being cut today.
What this should change for a CEO reading it now
The practical implication is not that flattening is wrong, or that Indian IT’s shift away from headcount-linked growth is a mistake. Both are rational responses to a real change in what AI can do to coordination and delivery work. The mistake is treating the resulting savings as unambiguous efficiency rather than as a withdrawal against a reserve that has to be replenished somehow, and somewhere. A useful discipline for any executive committee approving a restructuring or a hiring freeze this year is to ask, explicitly, which roles in the structure being removed were quietly doing double duty as leadership development, and to decide on purpose whether that development function is being preserved elsewhere (a rotational programme, a deliberately overstaffed high-potential cohort, an internal apprenticeship attached to delivery work) or simply being allowed to lapse because nobody had to sign off on losing it. The chief-of-staff boom is worth watching less as a curiosity and more as an early instrument reading: when coordination cost resurfaces at a premium two rungs higher in the org chart, that is the market telling you the layer you cut was doing more than you billed it for. Whether the cut came from the middle or the bottom, the leadership bench a company will need by 2030 is being decided largely by choices being made about cost right now, mostly by people who will not be the ones short-handed when it comes due.
