HubSpot Cuts 660 Jobs for a Flatter Organization: How to Remove Management Layers Without Breaking Your Company
HubSpot says fewer layers means faster decisions. Here is how growing companies can test that claim before cutting anyone.
In this article 7 sections
HubSpot is eliminating about 660 jobs, roughly 7% of its workforce, to build what CEO Yamini Rangan calls a flatter organization with fewer management layers. The board approved the plan October 1, 2026. For growing companies, the lesson is to test whether layers slow decisions before removing any, because flat structures only work with clear ownership.
This guide explains what HubSpot announced, why many companies are flattening, and how to decide whether the move fits your team. It is written for founders and executives of companies between 20 and 500 people. Upstart Wire covers how growing companies keep people and process from breaking, and a restructuring is one of the sharpest tests of that.
What Did HubSpot Announce?
HubSpot announced it is eliminating about 660 positions, roughly 7% of its global workforce, as part of a restructuring tied to AI-driven customer outcomes. The board authorized the plan on October 1, 2026, according to an SEC filing cited by Yahoo Finance's coverage. Reductions should finish by the end of the first quarter of 2027.
The company expects $65 million to $75 million in charges, mainly severance, notice periods, and transition and benefits payments. CBS Boston reports that affected workers get 20 weeks of base pay plus one week per year of service, capped at 30 weeks, along with five months of health benefits and career support.
Rangan described the change as a shift in how the company operates, not a response to cost pressure. She wrote that the company must "fundamentally change the way we are organized to compete and win." The goal is fewer management layers, with decisions made closer to the people doing the work.
She also said the layoffs are not driven by AI-related efficiencies, according to CBS Boston. Outside observers have noticed that the restructuring is tied to AI-driven outcomes anyway. The company's stated reason and the market's reading do not fully match.
Why Are Companies Flattening Their Organizations?
Companies flatten to speed up decisions, cut coordination costs, and push authority to the people closest to customers. Each management layer adds a handoff where information is delayed or filtered. Fewer layers can mean faster answers, but only when the remaining managers have clear scope and the staff can act without constant approval.
The trend is broad. Newsweek's coverage of October layoffs notes that Netflix is cutting about 1,000 jobs, or roughly 6% of staff, and eBay about 1,000, or roughly 9%. Challenger, Gray and Christmas counted 165,925 announced tech job cuts through September, up 54% from the same period in 2025.
Not every layoff is a redesign. HR consultant Bryan Driscoll told Newsweek that AI is an easy scapegoat for cost-cutting, and that white-collar workers, middle managers, and admin staff are especially exposed. That is a fair warning. A cut that removes managers without changing how work is decided just leaves the same bottleneck with fewer people.
The labor market adds context. Newsweek reports that the economy added only 29,000 jobs in September, and describes a low-hire, low-fire market. Laid-off managers may take longer to land new roles, which raises the human cost of a poorly planned flattening.
How Do You Know Whether Your Company Has Too Many Layers?
Look for symptoms: decisions that take weeks, managers who relay messages without adding judgment, and teams of two or three reporting to a manager who has no real work of their own. Measure the number of people between a customer problem and the person who can fix it.
The table below lists common signals and what they usually mean.
| Signal | What it suggests | First check |
|---|---|---|
| Decisions need three or more approvals | Too many layers or unclear authority | Map one recent decision end to end |
| Managers with one or two direct reports | Narrow spans of control | List reports per manager |
| Information arrives late or changed | Filtering between layers | Compare frontline and executive views |
| Strong staff leave for more autonomy | Authority sits too high | Review exit interview themes |
Start with one real decision. Pick a recent pricing change, a hiring approval, or a customer escalation, and trace every person who touched it. Note how long each handoff took and what each person actually added.
Then count spans of control, meaning the number of direct reports each manager has. There is no magic number, but a manager with two reports usually has spare capacity, while one with fifteen cannot coach anyone properly. Look for the outliers in both directions.
Decision speed is the metric that matters most. Pick a handful of recurring decisions, such as approving a discount or launching a campaign, and record how long each takes today. After the change, measure again. If the numbers do not improve, the layers were not the problem.
What Does a Flatter Structure Demand From Managers?
A flatter structure gives each remaining manager more direct reports and less time for hands-on supervision. That only works if managers are trained to coach, if people know which decisions they own, and if goals are clear. Without those pieces, a flat organization becomes a confusing one.
Wider spans mean less oversight per person. Employees must make more calls on their own, which requires clear guardrails: what they can decide, what needs a check-in, and what needs approval. Write those rules down for each role.
Many companies promote strong individual contributors into management without training. Upstart Wire's guide to building a leadership team when you have never managed managers covers the skills that become essential when managers lead other managers.
Peer coordination also gets harder. With fewer managers, teams must resolve conflicts directly, and that takes a norm of speaking up. Set a simple rule for escalation: try to resolve it between the two teams within two days, and bring in a leader if you cannot.
Delegation is the other pressure point. When layers disappear, leaders must hand off real authority, not just tasks. Upstart Wire's piece on delegation versus abdication explains where founders tend to cross the line.
Founders face a version of this question as a company grows. Upstart Wire's analysis of founder-led versus professional management describes how structure choices change as headcount rises.
What Are the Risks of Flattening Too Fast?
The main risks are manager overload, lost career paths, and decisions that stall because nobody owns them. Removing layers also removes people who held institutional knowledge. A company that flattens without a plan can end up slower than before, with weary managers and confused teams.
Manager overload comes first. A manager who goes from six reports to fourteen cannot hold the same weekly one-on-ones. Quality of coaching falls, and problems that used to surface early now surface late. Budget for training, and consider adding team leads who coordinate without formal authority.
Career paths are the second risk. Layers also serve as rungs on a ladder. When they disappear, ambitious people lose visible promotions and may leave. Offer alternatives, such as senior individual contributor roles with real scope and pay.
Knowledge loss is the third. Middle managers often hold the context that explains why a process exists. Before removing a role, document what that person knows, and name who inherits each responsibility.
Finally, morale takes a hit. The employees who remain after a reduction often work harder, while worrying about the next round. Honest updates on the plan, and a clear statement of whether more changes are coming, reduce that anxiety more than any perk does.
How Should You Run the Change?
Run a restructuring in five steps: define the problem, redesign roles before names, set decision rights, communicate early and clearly, and measure the result. Treat people fairly during the process, because the employees who stay watch how departing colleagues are treated and adjust their trust accordingly.
Follow this sequence:
- State the problem in one sentence, such as slow product decisions or duplicated work.
- Design the new structure around roles and decisions, then fill the roles.
- Write down decision rights for the top ten recurring decisions.
- Tell the company the reasons, the timeline, and what support departing staff will receive.
- Measure decision time, attrition, and customer response time at 30, 90, and 180 days.
Severance sets the tone. HubSpot's reported package of 20 weeks of base pay plus a week per year of service, with five months of health benefits, is generous by industry norms. A smaller company cannot match every element, but it can be clear, quick, and respectful.
Communication matters as much as money. Staff who learn about changes through rumors assume the worst. Give managers a script, and brief them before the all-hands meeting so they can answer questions.
Not every firing is a layoff, and firing someone slowly is rarely kind. Upstart Wire's essay on why firing fast is kinder than it feels makes the case for clarity. The same principle applies to a restructuring.
Conclusion
HubSpot's restructuring is a large bet that fewer layers means faster decisions. For a smaller company, the useful move is to measure first: trace a few real decisions, count spans of control, and write down decision rights before removing anyone. Upstart Wire will keep following how these flattening moves play out across industries.
