Remove 'Direct Reports' from SugarCRM Contacts subpanel

Create Directory: sugarcrm\custom\Extension\modules\Contacts\Ext\Layoutdefs

Create a file named layoutdefs.ext.php inside this directory with code as below:
<?php unset($layout_defs['Contacts']['subpanel_setup']['contacts']); ?>

Go to Admin->Repair->Quick Repair and Rebuld. This will execute the code