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

Block's Dorsey Outlines AI-Powered Vision to Cut Middle Managers

Jack Dorsey is pitching artificial intelligence as a replacement for middle managers in his reimagined view of how technology companies should function, weeks after Block Inc. announced it was cutting nearly half its staff. Dorsey outlined his thesis for the future of organizational structures in a blog post co-authored by Sequoia Capital partner Roelof Botha, arguing that AI could replace layers of management that traditionally coordinate work across companies. The post comes after Block said it was cutting about 4,000 employees in February, describing the decision as a bet on artificial intelligence changing the future of work, even as tech companies more broadly have been trimming roles following years of rapid hiring. "I don't think we're early to this realization," Dorsey, the co-founder and chairman of Block, said at the time of the cuts. "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. I'd rather get there honestly and on our own terms than be forced into it reactively." Jack Dorsey's Block Slashes Nearly Half Its Staff in AI Bet Artificial intelligence, Dorsey argues, can replace coordination functions that humans typically provide by relaying information through layers of management. Companies have long targeted middle management during downturns to cut costs and speed decision-making. The aim is to build a company "as an intelligence (or mini-AGI)," Dorsey writes. In this model, employees fall into three roles: individual contributors who build and operate systems; directly responsible individuals who own specific problems; and player-coaches who both build products and develop people, replacing traditional managers focused on coordination. Block argues it is well 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." "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. Block's cuts have also fueled broader debate over whether artificial intelligence is driving corporate job reductions or being used to justify them, with some critics warning of "AI washing" as companies look to reframe cost-cutting decisions. Dorsey's 4,000 Job Cuts at Block Arouse Suspicions of AI-Washing

Jack Dorsey and Roelof Botha think AI can make middle management obsolete | Fortune

In an essay published Tuesday co-authored with Sequoia advisor Roelof Botha and titled "From Hierarchy to Intelligence," Dorsey questioned the conventional wisdom of widely used organizational structures. "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," they wrote. In February, Block laid off 4,000 employees, or about 40% of its workforce. Dorsey made his reasoning clear: "We're already seeing that the intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company," he wrote in a Feb. 26 X post. Dorsey and Botha are rejecting what they see as 2,000 years of hierarchical organizational structures, starting with the Roman army, that relied on middlemen to "route information, pre-compute decisions, and maintain alignment across a complex organization," thereby slowing the flow of information. They argue companies today are still running on the same system. "Most companies using AI today are giving everyone a copilot, which makes the existing structure work slightly better without changing it," they wrote. "We're after something different: a company built as an intelligence (or mini-AGI)," they wrote. Block is not the only company that wants to axe middle management. In November, Amazon cut 14,000 corporate employees to "reduce bureaucracy" and "remove organizational layers." Months before the layoffs, Amazon CEO Andy Jassy said the company is cutting "well-intentioned" middle managers who "want to put their fingerprint on everything" to allow employees to move faster and give them more ownership over their work. Meta's AI team now has a 50-to-1 employee-to-manager ratio following the company's crusade against middle managers in recent years. Dorsey and Botha proposed companies need both a "world model" of their operations and a strong "customer signal." Simply put, they believe companies need a way to record and track all decisions, discussions, plans, problems, and progress to build an ever-evolving "world model." This system would replace the role of managers, who relay information across an organization. The second part of their plan is even more straightforward: Follow the money to determine the model's success. "Money is the most honest signal in the world," they wrote. This approach may work particularly well for Block because it can track buyers through Cash App and sellers through Square in real-time, and AI can process that information faster than humans. "The traditional roadmap, where product managers hypothesize about what to build next, is any company's ultimate limiting factor," they wrote. "In this model, customer reality generates the backlog directly." If you're wondering where Block's remaining 6,000 employees sit in this new model, Dorsey and Botha have an answer for that: the edge, or "where the action is." On the edge of their new system, people will be able to sense things the model can't perceive, such as cultural context, trust, intuition, and "the feeling in the room." What makes their proposal more than just a database is how humans will interact with it and use it without needing a chain of command, they wrote. "We're not making this decision because we're in trouble," Dorsey wrote in an X post on the day he announced the layoffs. "Our business is strong." The company reported a gross profit of $2.87 billion in Q4, up 24% year over year. Block's shares rose about 3% immediately after the pair published the paper on March 31, but have fallen slightly in the days since. Over the last year, the company's stock has fallen 9%. "Block is in the early stages of this transition," Dorsey and Botha wrote. "It will be a difficult one, and parts of it will likely break before they work."

AI could eliminate middle management, warns Twitter cofounder Jack Dorsey

In a blog post titled 'From Hierarchy to Intelligence', co-written with Sequoia Capital partner Roelof Botha, he explains how AI could replace multiple management layers that usually coordinate work across teams. Jack Dorsey feels artificial intelligence (AI) could replace middle managers, and said that companies can run without traditional hierarchies, just weeks after his financial services and digital payments company Block declared it would cut nearly half its workforce. 'AI can take over middle management' In a blog post titled 'From Hierarchy to Intelligence', co-written with Sequoia Capital partner Roelof Botha, he explains how AI could replace multiple management layers that usually coordinate work across teams. AI, Dorsey argues, can handle coordination tasks that humans typically perform by moving information up and down organisational chains. During downturns, companies have often trimmed their middle management layer to reduce costs and speed up decisions. "At Block, we're questioning the underlying assumption: that organizations have to be hierarchically organized with humans as the coordination mechanism. Instead, we intend to replace what the hierarchy does," the blog said. The blog explained that while most companies use AI as a copilot to slightly improve existing workflows, Block is aiming for something far more ambitious: to be a company designed around intelligence itself, or a "mini-AGI." "For the first time, a system can maintain a continuously updated model of an entire business and use it to coordinate work in ways that previously required humans relaying information through layers of management," Dorsey and Botha wrote. Three types of roles Per the approach outlined, Block's internal structure would change significantly. Employees would be grouped under three main roles instead of traditional reporting hierarchies. The first is the individual contributor, described as a "deep specialist", who receives directions from the AI model rather than a manager, enabling faster and more independent decisions. The second is the directly responsible individual who has ownership of specific cross-functional problems and has full permission to pull resources from the model. (DRIs are directly "responsible" for specific problems that span multiple teams, while ICs focus only on work within their own area of expertise.) Finally, there are player-coaches, who replace managers. These employees focus on "craft and people," that is, they both build products and develop talent. Block layoffs The post follows Block's announcement in February that it would cut around 4,000 jobs, framing the move as part of a broader shift towards an AI-driven future of work. "I don't think we're early to this realization," Dorsey, the cofounder and chairman of Block, said at the time. "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. I'd rather get there honestly and on our own terms than be forced into it reactively." The layoffs have sparked debate about whether AI is genuinely reshaping work or being used to justify cost-cutting, according to Bloomberg. Some critics have warned of "AI washing", where companies frame workforce reductions as part of technological transformation rather than financial necessity.

Block CEO Envisions AI Unseating Middle Managers | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Dorsey, the financial services/tech company's co-founder and CEO, put forth this idea Tuesday (March 31) in a blog post co-written by Sequoia Capital partner Roelof Botha, arguing that artificial intelligence (AI) could replace the "traditional hierarchy" of management. "At Block, we're questioning the underlying assumption: that organizations have to be hierarchically organized with humans as the coordination mechanism. Instead, we intend to replace what the hierarchy does," Dorsey and Botha wrote. "Most companies using AI today are giving everyone a copilot, which makes the existing structure work slightly better without changing it. We're after something different: a company built as an intelligence (or mini-AGI)." The post argued that the "remote-first" nature of Block allows it to achieve this goal, whereas a manager in a traditional company is charged with knowing what their team is doing and relaying that information along the chain. "In a remote-first company where work is already machine-readable, AI can build and maintain that picture continuously," the blog post continued. Block announced in February that it was cutting its staffing levels from more than 10,000 workers to just under 6,000, a much sharper reduction than what had been initially reported. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Dorsey said on an earnings call soon after the cuts. "I don't think we're early to this realization. I think that most companies are late." He added that "a significantly smaller team using the tools we're building can do more and do it better. And intelligence tool capabilities are compounding faster every single week." As PYMNTS wrote following the layoffs, Block's move is in line with a larger transition happening at technology and financial services companies. As AI increasingly drafts code, automates internal documentation, analyzes risk signals and handles customer support, the amount of human labor needed for certain workflows shifts. Companies are reconsidering team size relative to output. The report also pointed to a column from PYMNTS CEO Karen Webster arguing that 2026 marks the year AI adoption moves from "experimentation to operational reality," with AI being embedded into payments flows, customer engagement systems and enterprise software stacks. "Block operates squarely in that environment," PYMNTS added. "Payments processing, merchant services and peer-to-peer finance are data-heavy domains where AI can meaningfully reduce friction and manual effort."