Yes, you cut the domed parts off. Then you turn them over, so the cut part is down (it’s too hard to frost the cut side, and the side that was in the pan is a nicer shape.)
You don’t have to, but it makes the cake “pretty”. If you slice the round tops off, it is important to first frost with a thin layer of frosting to stick the crumbs down, then do the “real” frosting. Me, I don’t bother, rounded tops are fine.
You can also just put them upside down without cutting. Use a little extra frosting in the middle to make the top sit even. The bottom layer will sit well of you put it on a plate with flared sides rather than a platter.
Slice just a bit off the top of one layer and put it on your platter so the sliced side is down and the flat side is up. Slather some frosting on the flat side and then put the flat side of the 2nd layer on top of it. The top of your cake will still be domed, but hey, it’s cake, who cares.
Helpful hint on removing the “dome” while it’s still in the pan:
Take a length of thread or dental floss and slide it across the top of the plan, slicing off the part of the cake that sticks up over the lip.
Then eat that cut off part while you’re icing the cake.
A tip I read in a magazine: Score the side of the cake with a knife before you slice the layers. When you put it back together you can line the score lines up and it won’t be lopsided if the layers aren’t perfectly even.
I do two things to make ‘flatter’ cakes for stacking and layer cakes.
One is to spin the pan before baking. The spin forces the cake batter to the outside of the pan and results in a more even cake
I also have an insulated strip (I don’t know what it’s called but you can get one at craft stores that sell baking stuff and also in Walmart’s baking section) that is soaked in water and pinned to the outside edges of the pan. This keeps the edges a tiny bit cool so they don’t overcook and shrink.