On 6 July, Asha Sharma sent a memo to Team Xbox and then published it for everyone else to read.
There were plenty of headline numbers in it. Roughly 3,200 jobs going through the next financial year. About 1,600 on the day itself. Four studios moving to new owners.
But the number that should make senior leaders stop scrolling was not the job-loss figure.
It was fourteen.
In parts of Xbox, Sharma said, work was passing through as many as fourteen layers of management. She wants that cut to five at most, and to three where possible.
Fourteen layers is an extraordinary thing for any business to admit out loud. It is also exactly the kind of number that will now travel badly through boardrooms.
Because this is how these things go. One large, visible company says it is flattening the organisation, and suddenly flattening starts to get talked about as a strategy in its own right. It was only ever a tool. Other businesses will look at the fourteen-to-three headline and decide they have found the answer to cost, pace, accountability and the general swamp of modern corporate life.
Some will be right. Plenty will not.
It is easy to cheer the removal of layers
Management layers have a bad reputation, and quite often they have worked hard to earn it.
They slow decisions. They blur ownership. They turn simple questions into calendar archaeology. They create meetings about meetings, then a smaller meeting to agree what the bigger meeting should have decided in the first place.
Sharma’s memo makes the same point more politely. Complexity had slowed decisions, blurred accountability and made it harder to deliver for players. She also noted that platform teams were 40 per cent larger than at the start of the console generation, while the player base and playtime had both fallen.
On those numbers, some pruning was probably overdue.
The problem is what happens when a sensible correction becomes a fashion. There is a version of delayering that improves a business. It removes duplication, gives people cleaner ownership, makes decisions faster and stops managers existing purely as human forwarding addresses.
Then there is the other version, where the chart gets thinner, the work stays exactly where it was, and everyone left behind is expected to absorb the difference with a cheerful new job title and a slightly more heroic LinkedIn post.
You can cut a layer out of an org chart in an afternoon. You cannot cut the work out with the same line.
Those layers were probably doing something
This is the bit that gets missed when everyone starts nodding along to the word “flattening”.
Some layers are waste. Some are camouflage. Some exist because nobody has had the appetite to deal with a messy process, a weak system, a political handoff or a leader who enjoys having too many people beneath them.
But some layers are doing real work. They translate strategy into actual tasks. They chase awkward handoffs between teams. They absorb the small crises that never reach the executive committee. They spot people who are struggling. They train the next level down. They stop every decision from landing on the desk of someone already pretending that 70 hours a week is sustainable.
Remove those layers without redesigning the work, and nothing magical happens. The work just moves. Usually downwards onto already stretched teams, or upwards onto senior leaders who suddenly have broader spans, fewer buffers and no obvious place to hide when the old mess starts coming through the new structure.
This is where boards need to be honest with themselves. Are they removing genuine blockage, or just removing the people who used to hold the blockage together? That is not the same thing.
Flatter is not automatically faster
McKinsey’s State of Organizations 2026 report put some numbers around what a lot of people already recognise. Productivity is the priority. Complexity is the complaint. Inefficiency is everywhere.
So far, no great shock.
The useful part is the warning. The usual fixes are running out of road. Structural redesigns, cost cuts and flatter hierarchies can give a short-term lift, then the old problems return because the process underneath has not changed.
That is the bit too many businesses skip. They redraw the organisation chart and call it transformation. They take out a layer and call it pace. They put “accountability” in the memo and hope nobody asks who now owns the three broken workflows, two duplicated systems and one reporting cycle that caused the delay in the first place.
Sharma’s memo is more interesting because, at least on paper, she seems to understand that flattening alone is not enough. The language around “makers”, “player-coaches” and “directly responsible individuals” matters because it points beyond the chart. It is about who stays close to the work, who develops people, who owns decisions and how work moves through the business.
That is where the real test sits. Removing boxes is the easy half. The test is whether the boxes that remain have enough clarity, authority and support to do the work better. GitLab has been running its own restructure in public for much the same reason, and it is worth watching how that plays out.
This changes what senior leaders have to prove
For individual executives, this is not just an organisational design story. A flatter business asks different questions of the people left in it.
If there are fewer layers, there are fewer places to park responsibility. Wider spans of control mean less distance between the senior leader and the actual work. Named ownership means fewer committees to hide behind. The person who owns the decision also owns the outcome, including the uncomfortable bits that arrive three months later.
That changes what a senior executive CV has to show. For years, a lot of executive CVs have leaned heavily on scale: number of people managed, size of function, reporting line, budget, region, matrix, complexity. Those things still matter, but they are not enough.
In a flatter market, “I had a lot of people under me” is weaker currency than it used to be. The better evidence is judgement.
What did you personally own? What call did you make? What changed because of it? What result can you trace to a decision that was yours, and not to the general weather of the business?
A C-suite CV that still leads with hierarchy and buries judgement feels dated. It reads like a document from the fourteen-layer world.
That is not a small issue for senior candidates. Search firms, chief executives and boards are not short of people with impressive titles. They are short of people who can explain, clearly and quickly, what they owned and what it returned.
“Player-coach” is not a decorative phrase
One phrase in Sharma’s memo is worth pausing on: player-coach.
It gets thrown around a lot, sometimes by people who simply mean “do your old job and also manage more people”. In the wrong hands it is corporate code for overload, one role relabelled as two. Taken seriously, though, it says something about where leadership is going. The senior person cannot drift too far from the work. They cannot operate purely through layers, dashboards and second-hand summaries. They need enough proximity to understand the friction, enough authority to remove it, and enough judgement not to become a bottleneck themselves.
That is a harder leadership model than some executives admit. It asks for range. You need to think strategically without disappearing into abstraction. You need to support people without becoming their full-time air traffic controller. You need to own decisions without making every decision yourself. It is exactly the kind of shift a spell of executive coaching helps with, because changing how you operate is harder than picking up something new.
This is where some senior careers will strengthen and others will start to look exposed. The people who have led through change, carried outcomes, worked close to delivery and made decisions with consequence will have something useful to say. The people whose value has mostly sat in managing the layer beneath them may find the market less generous.
The ladder loses a few rungs
There is another consequence that businesses rarely dwell on when they announce delayering. The middle layers were not only cost. They were the training ground.
They were where talented specialists learned how to manage people before managing functions. They were where future directors got their first ugly lessons in budgets, conflict, prioritisation and being responsible for work they did not personally do. They were where people learned how organisations actually breathe.
Strip those layers out across a sector and the pipeline gets thinner. That matters for employers, who may save money now and discover later that they have fewer people ready for bigger jobs. It matters for individuals, because the old ladder is losing rungs.
The straight route upwards was never as tidy as people pretended, but it did at least exist in many large organisations. A specialist became a manager, then a senior manager, then a head of function, then a director. There were steps. There was time to learn. There were mistakes made at a survivable level.
Flattening makes that route less predictable. For some people the answer will be lateral. For others it will be an interim, fractional or portfolio path. For others again, a non-executive role may become part of staying close to the room where decisions are made. Waiting for the old ladder to reassemble itself is not much of a career plan.
What this means for your CV and LinkedIn profile
If your career story depends mainly on hierarchy, now is a good time to rethink it. That does not mean pretending scale is irrelevant. It matters. Boards still care whether you have led a team of 12, 120 or 1,200. They care about budget, geography, complexity and reporting line. But those details should back the argument up, and they cannot carry it on their own.
The stronger executive story now is built around ownership:
- the decisions you made
- the problems you inherited
- the ambiguity you removed
- the outcomes you produced
- the trade-offs you carried
- the people or functions you developed
- the pace you created without breaking the system beneath you
Anyone can say they were senior. The stronger CV shows you can still be trusted with consequence.
Your LinkedIn profile needs the same discipline. A profile full of inflated leadership language and no visible evidence of judgement will not help much. Nor will one that reads as if someone lifted a job description and added “strategic” five times.
The market is getting less patient with vague seniority. It wants to see what you actually owned. That may be unfair, but it is where we are.
Frequently asked questions
Why are companies flattening management layers in 2026?
The usual reasons are speed, cost and accountability. Some organisations have become too slow and too complicated. Decisions pass through too many people. Nobody quite owns the outcome. The work gets stuck in systems, committees and reporting lines that were meant to help at some point and now mostly preserve themselves.
AI is part of the pressure too. Some coordination, reporting and management admin can now be handled differently, which makes certain layers harder to justify. The danger is assuming that fewer layers automatically means better work. If the process underneath is still a mess, the mess just reaches people faster.
Does a flatter organisation mean fewer senior roles?
Often yes, though not always in a simple way. A flatter organisation may have fewer layers but broader senior roles, which can mean fewer titles, wider spans of control and more direct accountability for the people who remain.
It also means the route into senior leadership can become less straightforward. If the middle rungs are removed, people may need to build credibility sideways through transformation work, interim roles, portfolio careers, non-executive experience or broader cross-functional moves.
How should I position my CV for a delayered employer?
Do not lead only with the size of the team beneath you. Show what you owned. A delayered employer wants to see judgement, pace, accountability and evidence that you can operate without hiding behind structure, so each achievement should be framed around the decision, the pressure, the action and the result.
A useful test is simple: if the heading and employer name were removed, would the achievement still show why you mattered? If not, it probably needs more work.
Is delayering the same as downsizing?
No. Downsizing reduces headcount. Delayering removes levels of hierarchy. A company can do one without the other, though in practice they often arrive together because flattening is regularly used to justify cost reduction. Xbox appears to be doing both: cutting jobs and reducing management layers. The important question for any employer is whether they are also redesigning the work, or simply expecting fewer people to push the same problems through a thinner structure.
Sharma closed her memo with a warning about companies mistaking longevity for inevitability. Fair enough. There are plenty of businesses that could do with hearing it. But the lesson other boards take from Xbox needs to be the right one. Cutting fourteen layers to five is the easy part, because anyone can remove boxes. The harder part, and the one that actually pays, is making sure the work moves better once they are gone: clearer decisions, cleaner processes, proper ownership, better systems, and leaders who can stay close to the work without drowning in it.
For senior people, the message is more personal. The market has less time for vague seniority now, and it wants to see what you actually owned. If your CV, LinkedIn profile and interview examples still lean on the size of the structure beneath you, they may not be doing enough. The question that matters now is a simple one: what decisions can you put your name to, and what did they return?
