Block to replace 4,000 managers with AI says Jack Dorsey

Jack Dorsey is betting the future of his company on a radical idea: that artificial intelligence can run the business better than human managers.

Block Inc.’s recent decision to cut 4,000 jobs is not a cost-saving measure but a permanent restructuring to replace the firm’s middle management with artificial intelligence, CEO Jack Dorsey said. The move reframes the role of AI from a simple productivity tool to a core component of corporate hierarchy, potentially creating a new operating model for the $50 billion payments giant.

"Corporate hierarchy has always existed to solve one problem: routing information through organizations too large for any single person to oversee," Dorsey wrote in a new essay, "From Hierarchy to Intelligence," co-authored with Sequoia Capital's Roelof Botha. "AI can now perform those functions continuously and at scale, making the messenger redundant."

The plan, triggered by capability shifts Dorsey observed in models like Anthropic’s Opus 4.6 and OpenAI’s Codex 5.3, proposes two AI-driven "world models" to replace management layers. One model will map internal operations using code, workflows, and performance data, while the other will map customer behavior using transaction data from Cash App and Square. These models will feed an "intelligence layer" that dynamically assembles financial products, replacing traditional product roadmaps.

For investors, Dorsey’s strategy presents both a massive opportunity and a significant execution risk. If successful, replacing 4,000 mid-level employees could permanently lower Block's operating expenses and boost margins, giving it a structural advantage over rivals like PayPal and Adyen. However, the plan hinges on AI capabilities that current and former employees claim are not yet mature, with one report suggesting 95 percent of AI-generated code still requires human modification.

From Hierarchy to Intelligence

Dorsey and Botha’s essay argues that the primary function of a manager—to aggregate context from below, relay directives from above, and maintain alignment—is now being automated. In place of this, Block plans to operate with just three roles: individual contributors who build the system, "directly responsible individuals" who own outcomes on 90-day cycles, and hands-on "player-coaches."

The system is designed to be self-directing. When the AI models identify a customer need that cannot be met with existing capabilities—the essay uses the example of a merchant facing a seasonal cash-flow gap—the missing piece defines what gets built next. This replaces a human-led product roadmap with a system-generated backlog, a fundamental shift in how a large technology company operates.

Execution Risk and Internal Skepticism

The initiative is not without its doubters. Dorsey first pointed to a leap in AI capabilities he saw in December as the catalyst for the restructuring. Yet, current and former Block employees told the Guardian that the technology is far from autonomous. They reported that the vast majority of AI-generated code changes still require human intervention and that the tools are not yet capable of leading in highly regulated areas like banking and money transfers, which are core to Block's business. This internal view suggests the transition could be more challenging and prolonged than the leadership's vision implies, introducing potential disruptions to product development and operational stability.

This article is for informational purposes only and does not constitute investment advice.