Uber lays off 10% of their workforce to make the company "simpler and faster"

Uber announced Wednesday it’s cutting 10% of its workforce — about 3,000 jobs. It’s the company’s biggest round of layoffs since the pandemic.

In a letter to employees, Uber CEO Dara Khosrowshahi said the goal of the restructuring is to create a simpler, leaner organization with fewer layers of management. As part of that, the company is broadening the scope of some managers and reducing the number of micro-teams with just one or two people on them.

In any workplace, you’ve got what organizational psychologist Bob Sutton calls grease people and gunk people.

“When you've got the wrong middle managers in the wrong places, they can gum up the works,” he said.

Sutton is a professor emeritus at Stanford University. He said the idea with cutting management layers is you get rid of the people who slow things down and battle with others for power.

But sometimes, it can be hard to know the unappreciated invisible work that middle managers do. “Like making sure the handoffs work,” Sutton said. “[Or] actually knowing who to go to to gossip to get things done.”

He said this is part of a larger trend — let go of some managers, give other managers bigger teams. According to a Gallup review of U.S. workplaces, the average team has 12 people — about 50% larger than the average in 2013.

Sutton said companies can end up with teams that are too big: “What happens is that the boss gets overloaded, they become a bottleneck, it becomes frustrating,” he said.

In turn, more decisions can end up with the big boss, said Julia Dhar, managing director at Boston Consulting Group. “Instead of decision making moving down closer to the front line, things move up towards the CEO.”

Dhar said shrinking an organization’s size doesn’t necessarily save money, long-term. In order for it to make sense, companies have to figure out exactly how all the work — visible and invisible — is going to get done.

“If you don't, you will make a temporary shift in the cost base,” she said. “But you might equally add that back in terms of contractors [and] new hires in the subsequent years.”

Fewer workers aspire to be middle managers now, Dhar said. That’s a problem, because today’s middle managers are tomorrow’s leaders.

But as one of my bosses said to me today — it can be lonely in the middle.