Dorsey says AI should replace middle managers after layoffs

Block co-founder, Chairman, and chief executive officer Jack Dorsey has suggested that middle management roles may become obsolete as artificial intelligence (AI) takes on core coordination functions within companies, following significant job cuts at Block. In an essay titled “From Hierarchy to Intelligence”, co-authored with Roelof Botha of Sequoia Capital, Dorsey argued that the company’s decision to cut around 4,000 jobs was not primarily about reducing costs, but about restructuring around AI capabilities. The piece outlines a vision in which traditional corporate hierarchies are replaced by systems that can process and distribute information at scale.

AI as a replacement for management layers

The essay argues that middle managers have historically served as conduits for information, aggregating insights from teams, relaying directives from leadership and ensuring alignment across departments.

According to Dorsey and Botha, advances in AI now allow those functions to be automated continuously, reducing the need for intermediary roles.

Instead, they propose the creation of two AI-driven “world models”. One would compile internal company data, including code, workflows and performance metrics, to provide a real-time operational overview. The other would analyse customer and merchant behaviour using transaction data from Block’s platforms.

These systems would feed into what the authors describe as an “intelligence layer”, capable of dynamically assembling financial products based on demand.

Shift away from traditional product roadmaps

Under the proposed model, Block’s operations would be broken into modular capabilities such as payments, lending and payroll, rather than fixed product lines.

When a need is identified, for example, a merchant facing a short-term cash flow issue, the system would assemble a solution from existing components. If a required capability does not exist, it would be added to a system-generated development backlog.

The approach effectively replaces traditional product roadmaps with a more adaptive, data-driven process.

Leaner structure, fewer managers

The restructuring would also simplify organisational roles. Block envisions three primary categories: individual contributors building systems, directly responsible individuals overseeing specific outcomes on 90-day cycles, and “player-coaches” who combine hands-on work with mentoring.

Dorsey has said the shift was prompted by rapid improvements in AI tools late last year, including systems such as OpenAI Codex, which he believes can now operate effectively within large codebases.

Where is AI heading?

In another related news, Mustafa Suleyman, chief executive of Microsoft AI, has outlined a clear view of where the AI industry is heading. He says the next phase of AI will be shaped by access to inference compute, not just model intelligence. In simple terms, the companies that can afford to serve AI to millions of users in real time are likely to move ahead, while others may struggle to keep pace.

For several years, the AI sector focused heavily on training larger and more advanced models. However, the current challenge lies in running these models efficiently at scale. This process, known as inference, is now the main cost driver.

Meanwhile, OpenAI CEO Sam Altman has positioned India at the centre of the global AI landscape, stating that the country is not only adopting AI at scale but actively shaping its future. Speaking at the AI Impact Summit, Altman revealed that more than 100 million people in India use ChatGPT each week, with students accounting for over a third of that user base.