Work-related negative effects on well-being have increased in frequency and variability, specifically within the public sector and among managers. In the Job Demands-Resources model it is suggested that increased demands reduce well-being and decrease performance, but the research literature demonstrates little research in the context of managers and leadership. The purpose of this study was to investigate variability in work situations among Swedish public sector managers and how this was related to differences in stress, impaired health, work engagement and leadership performance. 267 managers in a mid-sized Swedish municipality responded to a web-based survey and formed six clusters. Three clusters comprising 42% of managers had less favorable working conditions and significantly worse well-being, less frequent transformational and transactional leadership behaviors as well as slightly lower work engagement. A conclusion from the study is that worse managerial working situations may lead to decreased possibilities to perform leadership in an active way.