Layoffs Thin the Middle, Then Productivity Thins Too

Recent reductions in middle management are straining communication, productivity, and the employee experience, according to a new survey from Firstup. As layers shrink, managers carry more responsibilities with less availability, and the link between leadership and the workforce weakens. Firstup’s CEO said managers translate organizational priorities into action, clarity, and connection for their teams, which is why bandwidth matters.

The Firstup report surveyed 1,000 U.S. full-time non-managerial employees whose organizations experienced layoffs in the past year. More than a third said their manager now seems stretched thin and less accessible. Front-line workers rely heavily on managers for information and support, with 52% naming their direct manager as the most trusted source for company updates and only 10% saying the same about senior leaders.

Managers are the first stop for questions and context, with 53% turning to them first for work-related questions and 86% relying on them to understand what business changes mean for their role. Two-thirds look to managers for help with work challenges, and half for coaching and professional development. Employees also count on managers for meaningful experiences, with 75% relying on recognition and appreciation and 82% on task and process guidance. Nearly three-quarters rely on their manager for career coaching and feedback.

Senior leaders are not filling the gap. Nearly 40% of workers said senior leaders do not provide mentorship or career guidance, 37% feel unheard and unsupported, and 47% described leadership as only somewhat transparent. Separate Gallup research cited by HR Dive shows engagement has fallen during the past year, with managers seeing the steepest decline, and reports warn about a manager crash among women and those under age 35.

Translate the signal into operating moves that protect manager capacity and employee clarity:

• Stabilize spans and support: Set practical spans of control, assign backup coverage, and add coordinator roles where load is highest.

• Route information deliberately: Define what updates must flow through managers, provide talk tracks, and time communications so teams hear first from their leader.

• Protect time for coaching: Reserve recurring one-on-ones and problem-solving blocks on manager calendars, and measure completion rates.

• Track availability and access: Include manager accessibility, response times, and recognition frequency in monthly people dashboards.

• Close the senior-leader gap: Publish clear mentorship and career-guidance routes from senior leaders, with commitments that employees can see.

When a manager’s time shrinks, clarity shrinks with it. Guard the roles that carry information, coaching, and recognition, so the rest of the organization can carry the work.

Underemployment and Talent Planning

Underemployment occurs when employees work below their skill level or outside of growth pathways. It can result from hiring conservatism, unclear mobility, or outdated job design.

Why It Matters:

• Wastes capability that could drive innovation

• Disengages employees who want to do more

• Pushes high performers toward external opportunities

• Creates inequity when overlooked groups carry the heaviest burden

What to Change and How:

• Audit capabilities regularly against actual role design

• Build visible internal mobility programs with pathways to growth

• Connect development planning to organizational priorities

• Include skills utilization as a metric in workforce planning, not just headcount

Organizations that identify and address underemployment build stronger pipelines, more loyal employees, and a culture of growth.