Middle management has this self-replicating dynamic of becoming bloated and inefficient. Most companies probably do not have good middle management, because they have too much of it.
I'm not the reason my teams need to do software supplier risk assessments, or fill in at least 4 different surveys about their wellbeing and functioning as a team, or provide forecasts of their cloud spend for the year, or manage data usage agreements for the consumers of their data in our data lake. Nor is my people leader. But I am accountable if we don't stay on top of these responsibilities which are expected of all teams.
ASML has 44,000 staff total, not sure how many are managers, but the 1,700 number does not strike me as particularly ambitious for a reorg in a company that size.
They're going to 1500, 1300ish can become engineers, 1700 are let go.
1500 managers of 14400 employees sounds a lot more normal to me.
For the past year I've only had three direct reports, which would have been too few to keep me occupied if I wasn't also acting tech lead.
IMHO, if you want engineering managers who can occasionally do hands-on things, you probably want a ratio around 6/7:1
Personally, my "manager" has about 35 reports and also other duties. Basically as long as everything is going OK I don't have much to do with him. This is a company of 75 people, there are no managers except for two of the four directors. Not quite like ASML :-)