> ## Content Index > Fetch the complete content index at: https://www.trentcotton.com/llms.txt > Use this file to discover other available public pages before exploring further. # Should You Eliminate Small Teams? The Ownership Threshold Test - URL: https://www.trentcotton.com/should-you-eliminate-small-teams-the-ownership-threshold-test/ - Published: 2026-09-09T13:41:46.000Z - Updated: 2026-09-09T13:41:46.000Z - Author: Trent Cotton - Tags: FutHRist, AI and the Workforce ## TL;DR: Should companies eliminate managers who run one- and two-person teams? **Short answer:** It depends, and the deciding variable is whether your individual contributors already own decisions in their domain. Widen the span above a team that still routes every call upward and you relocate the bottleneck instead of removing it. **Key stats you need to know:** - Uber cut about 3,300 roles, trimmed its manager population by 20%, and eliminated close to half its micro-teams. Average span moved from about 3.0 direct reports to 3.4, which buys roughly half a management layer. - 75% of HR leaders say their managers are already overwhelmed by expanding responsibilities. 69% say those managers aren't equipped to lead change. - The average manager now carries about 12 direct reports, close to double the number Gallup tracked in 2013. **The leadership takeaway:** Over the next 12 to 24 months, the companies that win on structure will be the ones that moved decision rights down before they moved boxes off the org chart. --- The Wall Street Journal reported that corporate America is [axing the micro-team boss](https://www.wsj.com/business/corporate-america-is-axing-the-micro-team-boss-173d3e4e?ref=trentcotton.com), the manager who supervises one or two people. I've sat on both sides of this call, and I won't pretend it's clean. In one role, I removed the management layer entirely. More than 50 individual contributors reported to me. I named team leads whose job was knowledge sharing and running point with a client, with zero management authority. It worked. We moved faster, we shipped more, and I stayed close to the business instead of hearing about it two people removed from the client. The part nobody puts in the press release is that it took a year of retraining people to believe a decision in their domain was theirs to make. In another role, I ran multiple small teams. Small, fast, iterative. That was right for that moment, because the work was ambiguous and we needed to change direction without a committee. Both structures worked. The structure wasn't the variable. The work was. What's happening now is different, and it's why I wrote in Fast Company that [AI isn't breaking your middle managers](https://www.fastcompany.com/91514051/ai-isnt-breaking-your-middle-managers?ref=trentcotton.com). Companies are cutting layers to hit a cost number and telling the board it's about speed. Speed is a byproduct of ownership. Remove the layer without transferring the judgment it was carrying and the work reappears one level up, on people who were already stretched. I call the test the **Ownership Threshold**. ## Is cutting the micro-team boss working? The early evidence says it saves money and buys less structural change than the announcements suggest. Uber's restructuring cut about 3,300 roles, trimmed its manager population by roughly 20%, and eliminated close to half its micro-teams, meaning teams with one or two direct reports. Average span of control moved from about 3.0 to 3.4\. That's half a management layer, which is real, and which is a long way from the flat organization the narrative promises. The more useful signal is where the work goes afterward. BCG's Julia Dhar described the pattern plainly in [Marketplace's reporting on the Uber cuts](https://www.marketplace.org/story/2026/09/02/uber-layoffs-aim-to-shrink-middle-management?ref=trentcotton.com): instead of decision making moving down toward the front line, things move up toward the CEO. Stanford's Bob Sutton named the same gap from another angle, noting that middle managers do invisible work like coordinating handoffs and navigating relationships. Delete the box and that work doesn't disappear with it. The managers who remain absorb it. [Gartner found](https://www.gartner.com/en/newsroom/press-releases/2024-10-15-gartner-survey-finds-leader-and-manager-development-tops-hrleaders-list?ref=trentcotton.com) that 75% of HR leaders say their managers are overwhelmed by expanded responsibilities, and 69% say those managers aren't equipped to lead change. The [McKinsey Health Institute](https://www.mckinsey.com/mhi/our-insights/addressing-employee-burnout-are-you-solving-the-right-problem?ref=trentcotton.com) has middle managers reporting higher burnout than any other group. So the honest scorecard reads: cost came out, half a layer came out, and coordination load went somewhere less visible. That's a trade worth making in some cases. It isn't a redesign, and the numbers behind it deserve the scrutiny I gave them in [Is Headcount Planning Broken? The New FTE Math](https://www.trentcotton.com/is-headcount-planning-broken-the-new-fte-math/) and [The Alibi Layoff: Is AI Really Behind the Cuts?](https://www.trentcotton.com/the-alibi-layoff-is-ai-really-behind-the-cuts/). ## What is the Ownership Threshold? The Ownership Threshold is the point at which a team can absorb a wider span of control because its individual contributors already own decisions in their domain. I use it at The Human Capitalist to separate structural change from cost-cutting theater. Below the threshold, ICs execute and escalate. Their manager holds the context, the client relationship, the prioritization calls, and the authority. Remove that manager and all of it lands on the next level up. Above the threshold, ICs hold their own domain. They make the call, they carry the client, they escalate by exception. That's the group I had when 50-plus people reported to me. My team leads weren't managers. They were the knowledge center and the client point. Authority sat with the person doing the work. To test where you sit, stop treating managerial work as one thing. Run it through the Value of Work Matrix from [The FutHRist: 5 Mindsets of the Future HR Pro](https://www.trentcotton.com/the-futhrist-5-mindsets-of-the-future-hr-pro/), which scores work on two questions: does this create real value, and does it require focused human judgment? Four quadrants come out of it, and managerial work scatters across all four: - **Protect** (high value, high judgment): coaching, prioritization tradeoffs, client context, the call nobody has made before. - **Automate and Scale** (high value, low judgment): status rollups, reporting, routing, capacity views. - **Danger Zone** (low value, high judgment): approval gates on work the IC understands better than the approver. - **Why Are We Doing This?** (low value, low judgment): the meeting about the meeting. Weight by hours, not task count. If most of a manager's week sits in Automate and Scale or Why Are We Doing This, the layer is a symptom of a design problem. If most of it sits in Protect, you're below the Ownership Threshold, and cutting will cost more than it saves. ## How should C-suite leaders respond? C-suite leaders and CHROs should respond by testing the Ownership Threshold before they touch the org chart. Sequencing determines whether flattening produces speed or produces escalations. 1. **Map the managerial work before you map the boxes.** Run every manager slated for elimination through the Value of Work Matrix, weighted by hours. You'll find out fast whether you're removing a layer or removing someone who was holding four kinds of work together. That's an architecture call before it's a cost call, which is the case I make in [The AI Fire Drill Era: Why CHROs Need an Architect Mindset](https://www.trentcotton.com/the-ai-fire-drill-era-why-chros-need-an-architect-mindset/). 2. **Move decision rights first, structure second.** Name what each IC now owns outright, in writing, with dollar thresholds and escalation exceptions. Do it 90 days ahead of any structural change. My retraining year worked because people were told what was theirs, then held to it. 3. **Fund the lead-without-manage role.** Someone has to carry knowledge sharing and the client relationship. Give that person title, comp recognition, and no direct reports. Cheapest structural move available, and almost nobody funds it. 4. **Watch the escalation rate, not the headcount number.** If escalations rise after the cut, decisions moved up rather than down. Set that baseline before you cut, or you'll never see it. Your engagement survey won't surface it either, for reasons I lay out in [Why Engagement Scores Hide Attrition Risk](https://www.trentcotton.com/why-engagement-scores-hide-attrition-risk/). 5. **Say the quiet part out loud.** If this is a cost decision, call it a cost decision. People can handle a hard business call. What they can't handle is being told a cut was about speed while their cycle times get worse. ## What this means for you as a leader Structure follows the work. Repeatable work with clear domain boundaries supports a wide span, and I've run one. Ambiguous, iterative work needs small pods, and I've run those too. The mistake in this cycle is picking a span number first and hoping the work adapts. Leaders who test the Ownership Threshold before they cut get the speed they promised the board. Leaders who cut first get two quarters of savings, then pay for the same coordination again in contractors, escalations, and a management bench that stopped wanting the job. **Find out what FutHRist mindsets you have with this free assessment:**