March 24, 2026
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Should IKEA Be Flattening Management?
IKEA became the latest corporation to undergo layoffs with a goal of “simplifying its organization” to speed up decision making and help reduce costs for customers.
As a result of the initiative, 800 roles “may become redundant” within group functions, IKEA said in a statement.
“We have grown too complex in a retail environment that requires speed and agility,” said Juvencio Maeztu, CEO of Ingka Group, IKEA. “Simplicity is one of our core values, and with this step, we are putting it at the center of how we organize, work and lead the company. This change is driven by our purpose — not to maximizing profit. It is about bringing our focus and decisions closer to our customers and the co-workers who serve them every day. This step will create the right pre-conditions to grow and lower prices while staying true to our vision of creating a better and more affordable and sustainable everyday life for the many people.”
IKEA Joins Kroger, Amazon, Walmart, and Other Retailers in Flattening via Layoffs
Among other retailers, Kroger last year announced layoffs of fewer than 1,000 corporate staffers as the grocer said in an internal memo it was looking “to simplify the organization, shift resources closer to our customers and focus on work that creates the most value.”
Amazon in January revealed internal plans to eliminate around 16,000 corporate roles globally, following an October move to reduce 14,000 roles.
“Our ambition is to be the world’s largest startup,” Amazon executives wrote in memos viewed by Business Insider. “That means doubling down on a culture of ownership, speed, and experimentation — which requires us to continue evolving how we’re structured.”
In what’s been dubbed the Great Flattening, tech giants including Microsoft, Google and Intel have been shedding middle managers for the past few years, but the streamlining has spread to retailers — including Walmart, Wayfair, and Starbucks — as well as corporations such as HSBC, Ernst & Young, and UPS.
Cutting back on middle managers can help businesses reduce costs, encourage more collaboration between frontline employees and senior executives, empower lower-level employees to take action, and reduce redundant approval steps to speed decision making, according to a 2020 report from McKinsey & Company.
Artificial Intelligence Could Further Flatten Operations
Artificial intelligence is also seen helping reduce management layers.
Gartner has predicted that by 2026, 20% of organizations will use AI to flatten their organizational structure, eliminating more than half of current middle management positions. Gartner said in October 2024, “AI deployment will also allow for enhanced productivity and increased span of control by automating and scheduling tasks, reporting and performance monitoring for the remaining workforce which allows remaining managers to focus on more strategic, scalable and value-added activities.”
However, several recent articles have called out the risks of flattening an organization too far. Having more direct reports means managers have less time to guide and motivate employees and raises risks related to miscommunication, mistakes, and morale. Brad Smith, chief science officer at meQuilibrium (meQ), told HR Morning, “Beyond the negative impact on team mental well-being… execution of corporate strategy is also likely to suffer. Middle managers have historically been the filterers and translators into action of senior executives’ business-speak.”
BrainTrust
Tom Ryan
Managing Editor, RetailWire
Recent Discussions
Discussion Questions
Do you see more benefits than drawbacks in the trend toward corporations flattening their organizational structures?
What risks may retailers or brands face as they streamline middle manager roles?
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Since 2022’s inflationary jolt, retail companies have responded with restructuring, layoffs and AI adoption. While these changes can cushion margins and improve organizational agility, they hurt households’ sense of security and consumer sentiment.
Cutting middle management creates an operational chasm between leadership and overwhelmed, understaffed teams. This gap matters, as leaders don’t have time to get into the weeds to optimize systems and many workers lack the experience to see beyond their functional silos.
To the extent that few (if any) of these companies can explain why the jobs existed in the first place it comes across as more of a fad, than some kind of well thought out direction.
Now some might argue that companies need to experiment, that sometimes these experiments don’t work out, and – since many face the same types of issues, and often respond in similar ways – coincident results give the deceptive appearance of mere copying.
If only I could really get behind that explanation….
Flattening organizational structures can create benefits, particularly around reducing bureaucracy and enabling faster decision-making. However, simply removing layers does not automatically produce greater speed or agility. In many cases, it can create new challenges—overburdened leaders, unclear accountability, and gaps in execution. Middle management often plays a critical role in translating strategy into action, coaching teams, and developing future leaders. When those layers are removed too aggressively, organizations risk losing the very infrastructure that supports operational consistency and talent development.
There is also a longer-term talent implication that is often overlooked. Flattened structures can limit advancement opportunities and weaken the development pipeline needed to build the next generation of leaders. Without intermediate roles, it becomes harder to cultivate experience, mentorship, and institutional knowledge. Over time, this can erode the organization’s ability to promote from within and create a deep talent bench ready to step into more senior roles.
Perhaps most importantly, large-scale flattening can send an unintended cultural signal. When organizations eliminate layers in pursuit of efficiency, employees may interpret the move as a message that loyalty and long-term development are secondary to cost control and short-term performance. That perception can impact morale, retention, and engagement. In retail especially—where execution, leadership development, and culture matter deeply—flattening structures should be approached carefully, ensuring that efficiency gains do not come at the expense of capability, continuity, and long-term growth.
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Since 2022’s inflationary jolt, retail companies have responded with restructuring, layoffs and AI adoption. While these changes can cushion margins and improve organizational agility, they hurt households’ sense of security and consumer sentiment.
Cutting middle management creates an operational chasm between leadership and overwhelmed, understaffed teams. This gap matters, as leaders don’t have time to get into the weeds to optimize systems and many workers lack the experience to see beyond their functional silos.
To the extent that few (if any) of these companies can explain why the jobs existed in the first place it comes across as more of a fad, than some kind of well thought out direction.
Now some might argue that companies need to experiment, that sometimes these experiments don’t work out, and – since many face the same types of issues, and often respond in similar ways – coincident results give the deceptive appearance of mere copying.
If only I could really get behind that explanation….
Flattening organizational structures can create benefits, particularly around reducing bureaucracy and enabling faster decision-making. However, simply removing layers does not automatically produce greater speed or agility. In many cases, it can create new challenges—overburdened leaders, unclear accountability, and gaps in execution. Middle management often plays a critical role in translating strategy into action, coaching teams, and developing future leaders. When those layers are removed too aggressively, organizations risk losing the very infrastructure that supports operational consistency and talent development.
There is also a longer-term talent implication that is often overlooked. Flattened structures can limit advancement opportunities and weaken the development pipeline needed to build the next generation of leaders. Without intermediate roles, it becomes harder to cultivate experience, mentorship, and institutional knowledge. Over time, this can erode the organization’s ability to promote from within and create a deep talent bench ready to step into more senior roles.
Perhaps most importantly, large-scale flattening can send an unintended cultural signal. When organizations eliminate layers in pursuit of efficiency, employees may interpret the move as a message that loyalty and long-term development are secondary to cost control and short-term performance. That perception can impact morale, retention, and engagement. In retail especially—where execution, leadership development, and culture matter deeply—flattening structures should be approached carefully, ensuring that efficiency gains do not come at the expense of capability, continuity, and long-term growth.