Companies cut managers, squeeze pay as workplace power shifts: survey
CALIFORNIA, UNITED STATES — The global workplace is undergoing a seismic shift as employers tighten control and employees recalibrate their expectations, according to the latest Korn Ferry Workforce 2025 survey.
Over the past year, companies have implemented tough measures—mandating office returns, flattening management layers, and restricting salary increases—to drive stability and growth. Yet, these moves are creating new tensions and rewriting assumptions about how, where, and why people work.
“When companies need to cut labor costs, middle managers are often the first in line for layoffs,” the Korn Ferry report found.
This year, 41 percent of employees said their organizations have reduced management layers. The impact is significant: 43 percent of employees say their leaders aren’t aligned, and 37 percent feel directionless due to fewer managers.
As the report notes, “Losing that management layer can quickly lead to employee confusion and dissatisfaction, ultimately affecting productivity.”
Lesley Uren, CEO of Korn Ferry Consulting, warns, “When management disappears, so does direction. A leaner organization today can mean a leadership crisis tomorrow.”
Trusted managers and the salary squeeze
The survey reveals that 80 percent of workers would stay in a job because they trust their manager. Amid growing resentment over layoffs and corporate directives—such as workplace surveillance and return-to-office mandates—having a manager in their corner matters more than ever.
Maria Amato, a senior client partner, emphasizes, “Any company that wants growth needs to care about workforce engagement levels. Our research for the World’s Most Admired Companies found that organizations with the highest motivation and engagement saw twice the revenue growth of their worst-performing peers.”
Financial pressures remain acute. “It’s always a powerful talent attraction tool, but money seems particularly relevant in 2025 when many workers are struggling with a serious salary squeeze,” the report states.
Seventy percent of survey respondents are concerned about the cost of living outpacing their salary, and 35 percent believe they are paid below the value of their skills.
David Ellis, SVP of talent transformation, puts it plainly: “A paycheck gets employees in the door. Job security, meaningful work, and respect for personal boundaries keep them from looking for the exit.”
AI readiness and hybrid work preferences
The report highlights a new global divide in AI adoption. Emerging economies, such as India, Brazil, and the Middle East, are leading in AI training and optimism, while workers in the United States, Europe, and Japan feel left behind.
“Leaders who master technology and AI aren’t just keeping up with the times,” says Bryan Ackermann, head of AI strategy & transformation. “They’re setting their businesses up for success.”
Hybrid work remains a flashpoint. Only 19 percent of employees working full-time in the office actually want to be there, while 48 percent would prefer a hybrid arrangement.
Daren Kemp, president of EMEA, sums up the challenge: “The best workplace policies aren’t about control. They’re about clarity, culture, and making it easy for people to do their best work.”
