Big Tech's great flattening is happening because it's out of options

Illustration by Idrees Abbas/SOPA Images/LightRocket via Getty ImagesThis post originally appeared in the Business Insider Today newsletter.You can sign up for Business Insider's daily newsletter here.Welcome back! In case you missed it, our new newsletter, Tech Memo, written by the great Alistair Barr, launched on Friday. Check out the first edition here. And if you aren't already, subscribe here.In today's big story, we're looking at Big Tech's obsession with cutting out middle managers and flattening their orgs.What's on deckMarkets: When companies like Facebook and Zillow IPO, they turn to this manTech: How one of the hottest coding startups almost died.Business: Gen Z is turning to blue-collar jobs.But first, no longer stuck in the middle.If this was forwarded to you, sign up here.The big storyFlat techiesGetty images; Tyler Le/BITechnology can quickly become outdated, but it's a job title in tech that's an endangered species: the middle manager.Big Tech is flattening its ranks to thin out layers of management in a bid to reduce bureaucracy, writes Emma Cosgrove, Tim Paradis, Eugene Kim, and Ashley Stewart.Middle managers have had to keep their heads on a swivel for a while. At the end of last year, BI's workplace expert Aki Ito detailed Corporate America falling out of love with the role.But the tech industry has taken the trend into overdrive, as is often the case. From Microsoft to Intel and Amazon, companies are shedding managers to make themselves as quick and lean as possible.The biggest immediate impact of flattening orgs is managers overseeing more workers. Some argue that will limit micromanagement. Others say you'll burn out the managers who are left behind.Big Tech is willing to take its chances, though.As Amazon CEO Andy Jassy said last fall: "I hate bureaucracy.""The goal again is to allow us to have higher ownership and to move more quickly," Jassy added.iStock; Rebecca Zisser/BIBig Tech's middle-management purge speaks to a larger trend: Let the stars shine and get rid of anyone else.Part of tech companies' efficiency push is to identify top performers and weed out underachievers.With that approach, you could argue there is less of a need for managers. No weak links in the chain means managers don't have to do as much hand-holding. Get out of the way and let your top performers do what they do best.This isn't a foolproof strategy, though. Someone being extremely capable at their job doesn't always correlate with them being an easy employee to manage. In fact, sometimes the opposite can be true.But what other options do these tech giants have? The pressure from startups like OpenAI and Anthropic is undeniable. Their smaller size also gives them a massive leg up to move quickly.And when it comes to AI, speed is the name of the game. Meanwhile, middle managers seem to only be slowing companies down.3 things in marketsPresident Donald Trump displays an executive order he signed that will end the practice of separating family members who are apprehended while illegally entering the United States on June 20, 2018 in Washington, DC.Win McNamee/Getty Images1. Trump's "Big, beautiful bill" could cause some big chaos. Market pros say the president's tax bill would add $4 trillion to the US deficit, stoking mayhem in the bond market. That means another Trump vs. bond market showdown could be headed our way.2. Bankers tell startups wanting to go public: "Go, go, go." Startups like Hinge Health put their IPO plans on hold when Trump introduced sweeping tariffs. Now that the stock market has recovered, bankers are telling companies to go public while they still can.3. This "hick from Ohio" is a big deal for IPOs. Pat Healy could be the forefather of getting stock exchanges to compete for the right to get a company to list with them. From free Davos advertising to NFL star appearances, here's how Healy lands companies major marketing perks.3 things in techGetty Images; Jenny Chang-Rodriguez/BI1. "Appstinence" is a virtue. Raised in the age of the smartphone, a growing cohort of people, mostly millennials and Gen Zers, are opting for dumb tech instead. As the evidence of our collective phone addiction adds up, even tech lovers are embracing the digital detox movement.2. How Silicon Valley's favorite startup came back from the edge of disaster. StackBlitz was at death's door when Anthropic released its AI model Sonnet 3.5 in 2024. That led StackBlitz to create Bolt.new, a product that could write code based on prompts written in English — and the company's gold mine. BI's Alistair Barr has the full story.3. Is AI coming for teachers? Duolingo CEO Luis von Ahn thinks so. On a recent podcast appearance, he told venture capitalist Sarah Guo that schools will still be necessary in an AI-driven future — but mostly just for childcare. He thinks AI will do the actual teaching.3 things in businessPeter Dazeley/Getty Images1. Gen Z is dyeing white collars blue. The cost of college is skyrocketing, and the white-collar job market is unstable. That's led many young people to turn to trades instead, which can offer six-figure salaries and have a high demand for workers.2. Selling a merger to Trump? MAGA-ify it. Cable giant Charter is merging with Cox, posing a bigger rival for Comcast. The merger still needs the green light from the Trump administration, and it seems like Charter is leaning into pro-American rhetoric to get it, BI's Peter Kafka writes.3. LA investor Jessica Mah is in a legal battle with DGV investor Justin Caldbeck and two ex-employees. In a lawsuit, Mah has accused Caldbeck of sexually harassing her, which he denies. The lawsuits against Mah, meanwhile, accuse her of misusing company funds, harassment, and age discrimination, BI's Rob Price reports.In other newsNo one seems to know if AI will take our jobs or make us productive superstars.Joe Biden was diagnosed with an 'aggressive form' of prostate cancer.Boeing was the real winner of Donald Trump's trip to the Middle East.I was an HR manager at Meta who helped guide the layoff process. Then they cut my role too — here's what being laid off taught me.We put Tesla's FSD and Waymo's robotaxi to the test. One shocking mistake made the winner clear.Trump's EPA is trying to reverse a Biden climate initiative that would have provided financing for new housing projects.Dairy Queen CEO explains what a job interview with Warren Buffett is like.What's happening todayWNBA season begins.The Business Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, senior editor, in London. Grace Lett, editor, in Chicago. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.Read the original article on Business Insider

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