A business without excess management: lessons from job cuts at German corporations

Leadership and business organisationLast updated: August 2026Reviewed by Vitalijs Kilsbach, founder & business coach

Volkswagen plans to cut more than 5,000 of the roughly 21,500 management positions in the group by the end of the decade. At Deutsche Bahn, according to CEO Evelyn Palla, around one in three positions in group management could disappear. The pharmaceutical group Bayer has already reduced its management positions from 17,000 to around 5,000. Similar processes are under way at Siemens, Lufthansa and the chipmaker ASML. A Civey survey commissioned by Handelsblatt (July 2026) found that 40 % of the top managers surveyed said their company had cut middle management positions in the past 12 months.

Behind these figures lies not just a reaction to a specific situation, but a deeper shift in how companies are organised. If you are building your own business in Germany – from scratch, without an inherited, bloated structure – it is useful to understand the logic of this shift: it directly affects what a company’s management should look like from day one. An overview of the conditions for self-employment: Self-employment in Germany: opportunities, costs and the route to your own company.

This article is based on data and expert assessments from a Handelsblatt publication and is for information purposes only. It does not replace individual advice on organisational development, recruitment or running a business.

What is happening to management in German companies

The cuts in middle management are primarily not about AI but about companies getting rid of structures that grew in the 2010s. Sophia von Rundstedt, head of the outplacement consultancy von Rundstedt, notes that demand for her services has risen by around 30 % over the past year, with many clients being experienced managers over 50 without direct customer contact – in other words, headquarters staff.

Economist Enzo Weber of the Institute for Employment Research (IAB) calls what is happening a “transformation crisis” and distinguishes it from previous crises – the 2009 financial crisis or the pandemic. In the past, companies in a crisis usually kept their business model and simply waited for hard times to pass. Today, according to Weber, companies are changing their very structure – and that affects management levels and headquarters as well.

It is not just AI: three forces changing company structures

Andrea Anderson, a partner at the consultancy Mercer, puts it this way: “AI is an accelerator of this process, but certainly not its cause.” In her view, companies are above all trying to shed historically grown, expensive structures. At the same time, since 2022 there has been growing awareness that change can no longer be postponed – not least because it has become clear that artificial intelligence is here to stay.

Fabiola Gerpott, professor of leadership at WHU – Otto Beisheim School of Management, puts it more bluntly: “AI is not just another piece of software” – the technology is changing the very “operating system of companies”. She predicts that by 2035 the question will not be whether AI supports management decisions, but why people ever thought every such decision had to be made by a human. Gerpott calls what is happening now “harbingers” – the real change will come when AI no longer just helps employees but carries out management tasks on its own.

Michael Brigl, head of BCG in Central Europe, expects a “second wave” of AI’s impact on organisations: “Thanks to AI, four out of ten management levels may remain.”

AI and management: what gets automated and what remains human

According to the IAB, the tasks most open to automation are those based on clear rules and data: approving holidays, document workflows, budget control, preparing reports. AI can also partly help with training new employees – providing learning materials and tracking progress.

Tasks that require interpersonal judgement, responsibility or decisions under high uncertainty, on the other hand, are still considered non-automatable by experts. Lennard Schmidt, co-founder of the AI platform Langdock, uses AI in his own management work as a “sparring partner” – for preparing reports for employees, analysing team survey results or presentations. His experience: “AI alone cannot motivate anyone.” As a communication adviser the technology can be useful, but the actual work of leading remains with people.

A practical guideline for anyone building a business follows from this: tasks with clear rules and repetitive patterns can increasingly be handed over to AI tools. Tasks that require trust, context and responsibility remain management tasks – whether they are carried out by a specially hired manager or by the company’s founder. For IT professionals: AI-proof IT skills and the route to self-employment.

Management careers in question: why more and more managers are considering their own business

The changes affect experienced professionals and managers above all. According to the Federal Employment Agency (Bundesagentur für Arbeit), on average around 85,000 unemployed managers were registered in Germany in the year to June 2026 – almost 45 % more than in 2022/2023. And between July 2025 and June 2026, around 209,000 managers were out of work at some point.

In Weber’s view, managers are well suited to retraining thanks to their experience and can apply their skills across different areas – purchasing, sales, production, HR or finance. Among the growing fields he names healthcare, renewable energy and automotive electronics.

For some of these professionals, one option is not only to look for a new salaried position but to start their own business. Experience of managing teams, budgets and change is exactly what is needed when building a company. This also applies to many international managers whose experience has not yet found a use in salaried employment in Germany. Whether this route suits a particular person depends on personal, financial and legal circumstances and requires an individual assessment. Guidance on taxes and current rules: Self-employed in Germany 2026.

The company of the future: what an organisation without unnecessary hierarchy levels looks like

According to Andrea Anderson, the classic “pyramid model” – a broad base of employees and an ever narrower top of managers – is becoming too slow, complex and inflexible: “Decision paths are too long.” The key question for companies today, in her view, is not how to build an organisation from the bottom up, but which capabilities the company needs. The organisation of the future is accordingly a flatter structure in which teams largely manage their own work and work cross-functionally on products, while AI takes over routine tasks.

A frequently cited example is the reorganisation at Bayer: since 2023 the number of hierarchy levels in the group has fallen from 11–12 to 6–7. Under its internal model “Dynamic Shared Ownership” (DSO), around 95 % of decisions are to be made by those who do the work rather than by senior management. According to the company, the remaining managers are to exercise less control and focus more on setting goals, building structures and developing employees.

BCG consultant Michael Brigl sees this as a signal for the future: “The functional organisational structure has no future; it is increasingly about process orientation.” Instead of being divided into purchasing, production and sales departments, companies are increasingly working in cross-functional teams along the entire value chain – which shortens decision paths and makes the company more agile.

How to build a business without excess management from scratch

People who are only just founding a company have an advantage over large corporations: they do not first have to dismantle an inherited, bloated structure. A few principles can be derived from the trends described above – these are general guidelines, not rigid instructions: which structure suits you depends on your industry, team, growth rate and legal framework.

When a company does need a middle manager

A flat structure is not an end in itself. There are typical situations in which companies usually consider an additional management level: team growth to the point where coordination without clearly assigned roles becomes difficult; industry or regulatory requirements that call for a formal structure of responsibility; highly specialised areas that need a dedicated head; or a growth phase in which the founder can no longer personally make every operational decision.

Whether and when an additional management level is justified in a specific case depends on the industry, team size, growth rate, financing and legal framework – and has no universal answer. An individual assessment of the situation, for example as part of business consulting or start-up coaching, helps avoid typical mistakes.

Common mistakes when building a company structure

Checklist: does your team need a manager yet?

The points below give only general guidance and do not replace individual advice on organisational development.

• Areas of responsibility in the team are clearly defined and documented
• Everyone understands how decisions are made
• There are documented processes for recurring tasks
• AI tools are used deliberately for routine tasks
• The team has regular, reliable communication formats
• Growth and the possible creation of new management positions are planned in advance rather than decided reactively

Frequently asked questions

Conclusion

The current reduction in management positions at German corporations is linked to several factors: inherited, expensive structures, economic pressure and – increasingly – artificial intelligence, whose impact experts expect to grow in the coming years. According to the data available today, this does not mean the end of management as such, but rather its transformation: from coordination and control to responsibility, direction and decisions under uncertainty – tasks that, in the experts’ view, are unlikely to be fully automated in the foreseeable future.

For those building their own business, this is an opportunity: the structure can be designed deliberately from the outset, instead of having to dismantle an overgrown hierarchy years later. And for experienced managers whose position is changing or disappearing, their own business can be one way of applying their accumulated experience in a new way.

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