Yes — you can roll it back without making it feel like a punishment, but the framing matters a lot.
I’d position it less as “you failed in this role” and more as “we tested a structure, and the structure isn’t producing what the business needs right now.”
Something like: We created this position to increase my capacity and help us grow, but after two quarters we’re seeing lower field capacity and the financial return isn’t there. That tells me the structure itself needs to change. I want to move back toward a more decentralized model and put people closer to the work where they’re strongest.
Then be direct about what their new seat is, why it matters, and what success looks like there.
I also wouldn’t overuse “financial reasons” if fit is part of the truth. If you only blame the numbers, they may feel blindsided if they know performance has been an issue too. You can say both:
“This is partly structural, partly financial, and partly about where I think you can create the most value.”
The biggest mistake would be dragging it out because you’re afraid of alienating them. A bad structure gets more expensive the longer you protect it.
I’ve learned that sometimes scaling means trying an org chart, realizing it doesn’t work, and being willing to redesign it without treating that as failure.