“When you look back in 10 years, you’re likely to say this was the most powerful change made at Citi,” he said. Now, Mayo told me for a profile of Fraser in the current issue of Fortune, “there’s nowhere to hide.”

There are fewer dark corners in lower levels of the company too. As part of the overhaul, Fraser cut Citi’s layers of management from 13 to eight, a move she said at the time would result in a “simpler firm that can operate faster, better serve our clients and unlock value for our shareholders.” 

So far, it’s hard to argue with the results. Fraser is five years into her plan to remake the bank that has long been a Wall Street laggard. In April, Citi logged its highest quarterly revenue in a decade, with all five divisions recording gains. The bank’s return on tangible common equity hit 13.1% in the first quarter, the highest since 2021. Citi stock is up about 80% since Fraser took over as CEO. The comeback this week earned Fraser the top spot on Fortune’s Most Powerful Women list. 

It is, of course, difficult to prove a purely causal relationship between Citi’s de-layering and its recent earnings. In fact, research on whether ‘flatter’ organizations perform better than ‘taller’ ones is mixed, says Clifford Oswick, professor of organization theory at Bayes Business School. De-layering truly works, he says, when it’s a means to other “purposeful ends” that “people can buy into and commit to, and which is going to improve organization performance long term.”

The great flattening

The business world cycles through periods of tight and “loose” or flat culture, the latter being more popular when the economy is relatively good, André Spicer, executive dean of Bayes Business School, previously told Fortune. And flatter structures are all the rage right now. 

The average number of people reporting to managers rose from 10.9 in 2024 to 12.1 in 2025, according to a January Gallup report. Last year’s figure represents a nearly 50% increase in team size since Gallup first measured, in 2013.

Meta, for one, is reportedly employing an ultra-flat 50-to-1 employee-to-manager ratio in its new applied AI engineering team. Earlier this month, Coinbase CEO Brian Armstrong said he was laying off 14% of the company’s workforce and increasing employee-to-manager ratios to as many as 15 to one. 

The theory is that a flat organization boosts agility by shortening decision chains and putting leaders closer to frontline employees and the customer experience. With fewer layers, new ideas move more quickly. When employees have more direct access to decision‑makers, they tend to feel more engaged and develop a stronger sense of ownership over outcomes.

AI seems to be supercharging the ‘great flattening’ by giving leaders the sense that they can do more with fewer people and introducing the possibility of automating some middle-manager duties like task allocation and employee counseling. 

Workplace culture is also experiencing a generational shift toward flatter orgs as millennials seek more “participative or inclusive forms of management” versus the “command and control” models that Gen X was accustomed to, Oswick says. 

The limits of a flat org

But flat orgs can sometimes cause problems in practice. Less experienced workers can get lost on sprawling teams, line managers can get overwhelmed, and everyone in between can feel rudderless. In many cases, Spicer says, teams give into the natural urge to divide into smaller, easier-to-govern groups; in the absence of former hierarchies, they establish makeshift ones.  

But rather than get bogged down in the perfect team size (research suggests it’s around seven or so), there’s a larger principle that CEOs should keep in mind as this trend continues, says Oswick: flattening an organization should drive a larger agenda. It cannot just be a cost-cutting exercise or an attempt by a new CEO to “demonstrate impact,” he says. 

At Citi, de-layering was part of Fraser’s broader effort to slim the bank down from the gargantuan ‘financial supermarket’ it had grown into and to streamline its focus. She also divested numerous businesses and cleaned up internal controls. 

“The thing about the structure is [that it’s] one of the least important parts of an organization,” says Oswick. “If you’ve got really good relationships, really strong culture aligned to the organization’s mission, you’ll succeed in spite of the structure.”