diff --git a/e2e/utils/create-project-utils.ts b/e2e/utils/create-project-utils.ts
index c4440c2ce2e04f..b00d2b492a6951 100644
--- a/e2e/utils/create-project-utils.ts
+++ b/e2e/utils/create-project-utils.ts
@@ -53,10 +53,15 @@ export function newProject({
       });
 
       if (unsetProjectNameAndRootFormat) {
+        console.warn(
+          'ATTENTION: The workspace generated for this e2e test does not use the new as-provided project name/root format. Please update this test'
+        );
         updateJson<NxJsonConfiguration>('nx.json', (nxJson) => {
           delete nxJson.workspaceLayout;
           return nxJson;
         });
+        createFile('apps/.gitkeep');
+        createFile('libs/.gitkeep');
       }
 
       // Temporary hack to prevent installing with `--frozen-lockfile`
diff --git a/e2e/workspace-create-npm/src/create-nx-workspace-npm.test.ts b/e2e/workspace-create-npm/src/create-nx-workspace-npm.test.ts
index 2a11dc1031cbb1..0a927597b88201 100644
--- a/e2e/workspace-create-npm/src/create-nx-workspace-npm.test.ts
+++ b/e2e/workspace-create-npm/src/create-nx-workspace-npm.test.ts
@@ -63,7 +63,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/angular:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/angular:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -78,7 +80,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() =>
-      runCLI(`generate @nx/js:library ${libName} --no-interactive`)
+      runCLI(
+        `generate @nx/js:library ${libName} --directory packages/${libName} --no-interactive`
+      )
     ).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -115,7 +119,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/react:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/react:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -141,7 +147,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/next:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/next:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -170,7 +178,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/react-native:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/react-native:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -196,7 +206,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/node:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/node:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
@@ -222,7 +234,9 @@ describe('create-nx-workspace --preset=npm', () => {
     const libName = uniq('lib');
 
     expect(() => {
-      runCLI(`generate @nx/nest:lib ${libName} --no-interactive`);
+      runCLI(
+        `generate @nx/nest:lib ${libName} --directory packages/${libName} --no-interactive`
+      );
     }).not.toThrowError();
     checkFilesExist('tsconfig.base.json');
     const tsconfig = readJson(`tsconfig.base.json`);
diff --git a/e2e/workspace-create/src/create-nx-workspace.test.ts b/e2e/workspace-create/src/create-nx-workspace.test.ts
index 601f84721fc01c..dab4f71f77446e 100644
--- a/e2e/workspace-create/src/create-nx-workspace.test.ts
+++ b/e2e/workspace-create/src/create-nx-workspace.test.ts
@@ -106,12 +106,7 @@ describe('create-nx-workspace', () => {
       packageManager,
     });
 
-    checkFilesExist(
-      'package.json',
-      packageManagerLockFile[packageManager],
-      'apps/.gitkeep',
-      'libs/.gitkeep'
-    );
+    checkFilesExist('package.json', packageManagerLockFile[packageManager]);
 
     expectNoAngularDevkit();
   });
diff --git a/packages/workspace/src/generators/new/files-integrated-repo/tools/tsconfig.tools.json b/packages/workspace/src/generators/new/files-integrated-repo/tools/tsconfig.tools.json
deleted file mode 100644
index 99428e1473febd..00000000000000
--- a/packages/workspace/src/generators/new/files-integrated-repo/tools/tsconfig.tools.json
+++ /dev/null
@@ -1,12 +0,0 @@
-{
-  "extends": "../tsconfig.base.json",
-  "compilerOptions": {
-    "outDir": "../dist/out-tsc/tools",
-    "rootDir": ".",
-    "module": "commonjs",
-    "target": "es5",
-    "types": ["node"],
-    "importHelpers": false
-  },
-  "include": ["**/*.ts"]
-}
diff --git a/packages/workspace/src/generators/new/generate-workspace-files.spec.ts b/packages/workspace/src/generators/new/generate-workspace-files.spec.ts
index 2ab57aac5a84a4..57ba656c74ba6a 100644
--- a/packages/workspace/src/generators/new/generate-workspace-files.spec.ts
+++ b/packages/workspace/src/generators/new/generate-workspace-files.spec.ts
@@ -226,9 +226,6 @@ describe('@nx/workspace:generateWorkspaceFiles', () => {
       packageManager: 'npm',
       isCustomPreset: false,
     });
-    expect(tree.exists('/proj/packages/.gitkeep')).toBe(true);
-    expect(tree.exists('/proj/apps/.gitkeep')).toBe(false);
-    expect(tree.exists('/proj/libs/.gitkeep')).toBe(false);
     const nx = readJson(tree, '/proj/nx.json');
     expect(nx).toMatchInlineSnapshot(`
       {
diff --git a/packages/workspace/src/generators/new/generate-workspace-files.ts b/packages/workspace/src/generators/new/generate-workspace-files.ts
index c19920900fc4f4..9c2e1eda71a60f 100644
--- a/packages/workspace/src/generators/new/generate-workspace-files.ts
+++ b/packages/workspace/src/generators/new/generate-workspace-files.ts
@@ -45,7 +45,6 @@ export async function generateWorkspaceFiles(
   }
   setPresetProperty(tree, options);
   addNpmScripts(tree, options);
-  createAppsAndLibsFolders(tree, options);
   setUpWorkspacesInPackageJson(tree, options);
 
   await formatFiles(tree);
@@ -57,7 +56,6 @@ function setPresetProperty(tree: Tree, options: NormalizedSchema) {
       addPropertyWithStableKeys(json, 'extends', 'nx/presets/npm.json');
       delete json.implicitDependencies;
       delete json.targetDefaults;
-      delete json.workspaceLayout;
     }
     return json;
   });
diff --git a/packages/workspace/src/generators/preset/preset.ts b/packages/workspace/src/generators/preset/preset.ts
index b3e722bcb9857b..21e35e83ea1836 100644
--- a/packages/workspace/src/generators/preset/preset.ts
+++ b/packages/workspace/src/generators/preset/preset.ts
@@ -1,10 +1,4 @@
-import {
-  installPackagesTask,
-  names,
-  readNxJson,
-  Tree,
-  updateNxJson,
-} from '@nx/devkit';
+import { installPackagesTask, names, Tree } from '@nx/devkit';
 import { Schema } from './schema';
 import { Preset } from '../utils/presets';
 import { join } from 'path';