Jack Dorsey outlines AI vision to replace middle managers after Block cuts 4,000 jobs

Jack Dorsey Proposes AI Replacing Middle Managers in New Company Model

Jack Dorsey is making a bold case for AI to replace middle management entirely, weeks after Block Inc. announced it was cutting approximately 4,000 employees in February—nearly 40% of its workforce 1

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. In a blog post titled "From Hierarchy to Intelligence" co-authored with Sequoia Capital partner Roelof Botha, Dorsey argues that artificial intelligence can handle coordination tasks that humans typically perform by moving information through organizational layers 2

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. The co-founder and chairman of Block Inc. frames this as an inevitable shift rather than an experimental approach. "I don't think we're early to this realization," Dorsey said at the time of the layoffs. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes" 1

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Building a Company as Intelligence: The Mini-AGI Vision

Dorsey and Botha are rejecting what they describe as 2,000 years of hierarchical organizational structure, starting with the Roman army, that relied on middlemen to "route information, pre-compute decisions, and maintain alignment across a complex organization" 2

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. Their vision centers on building a company "as an intelligence (or mini-AGI)" rather than simply giving employees AI copilots that make existing structures work slightly better 3

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. "Companies move fast or slow based on information flow. Hierarchy and middle management impede information flow," Dorsey writes, adding that humans are no longer the only option for those organizational layers 1

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. The approach requires two key components: a "world model" that records and tracks all decisions, discussions, plans, problems, and progress, and a strong "customer signal" to determine success 2

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Three Roles Replace Traditional Corporate Hierarchy

Under this flatter organizational structure, Block's remaining 6,000 employees would fall into three distinct roles instead of traditional reporting hierarchies 3

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. Individual contributors function as deep specialists who receive directions from the AI model rather than a manager, enabling faster and more independent decisions. Directly responsible individuals own specific cross-functional problems and have full permission to pull resources from the model. Player-coaches replace traditional managers, focusing on both building products and developing talent rather than coordination functions 3

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. "At Sequoia, we see that speed is the best predictor of start-up success. Most companies are focused on AI as a productivity enhancer. Few are focused on the potential of AI to change how we work together," Dorsey and Botha wrote 2

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Block's Economic Graph Advantage and Remote-First Structure

Block argues it is uniquely positioned to pursue this approach because it sits on both sides of millions of transactions through Cash App and Square, giving it a real-time view of consumer and merchant behavior—what it calls its "economic graph" 1

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. "Money is the most honest signal in the world," they wrote, suggesting that AI can process transaction information faster than humans to generate product backlogs directly from customer reality 2

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. The remote-first nature of Block also facilitates this transition. "In a remote-first company where work is already machine-readable, AI can build and maintain that picture continuously," the blog post explained 4

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. The company reported a gross profit of $2.87 billion in Q4, up 24% year over year, though its shares have fallen 9% over the last year .

AI Washing Concerns and Broader Industry Implications

Block's job cuts have sparked debate about whether AI is genuinely driving corporate job reductions or being used to justify cost-cutting decisions. Critics have warned of "AI washing" as companies look to reframe layoffs as part of technological transformation rather than financial necessity 1

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. "We're not making this decision because we're in trouble," Dorsey wrote on X the day he announced the layoffs. "Our business is strong" 2

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. Block is not alone in this shift—Amazon cut 14,000 corporate employees in November to "reduce bureaucracy" and "remove organizational layers," while Meta's AI team now operates with a 50-to-1 employee-to-manager ratio 2

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. Block's shares rose about 3% immediately after the pair published the paper on March 31, but have fallen slightly in subsequent days 2

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. "Block is in the early stages of this transition," Dorsey and Botha acknowledged. "It will be a difficult one, and parts of it will likely break before they work" 2

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