Block Inc. CEO Jack Dorsey and Sequoia Capital managing partner Roelof Botha published an essay calling for the elimination of traditional middle managers, arguing that AI systems can now replace the information-relay function those roles have performed for decades. The essay, "From Hierarchy to Intelligence," appeared alongside Block's disclosure that it has cut roughly 4,000 jobs - about 40% of its workforce - shrinking from over 10,000 employees to approximately 6,000.
The document traces corporate hierarchy from Roman military structures through 19th-century railroad management frameworks and post-WWII corporate pyramids to today's matrix organizations. Dorsey and Botha's conclusion is blunt: all of it is outdated infrastructure built for a world that no longer exists. The restructuring is not a reaction to a bad quarter. Dorsey has framed it as a permanent philosophical shift enabled by AI tools.
Three roles, zero information relays
Block's new organizational model replaces traditional managers with three types of roles: individual contributors, Directly Responsible Individuals (DRIs), and player-coaches. DRIs own outcomes on specific projects. Player-coaches are senior people who do hands-on work while mentoring others. Neither role performs the classic middle-manager function of aggregating information from below and translating it for people above.
The company is building what the essay calls "world models" - AI systems designed to maintain real-time context about operations and customer insights derived from transaction data across Square, Cash App, and other products. Instead of a regional manager synthesizing weekly reports into a deck for a VP, these systems route information dynamically and surface decisions to the people best positioned to make them.
Dorsey's advocacy for flatter organizations is not new. His tenure at Twitter included periodic attempts to reduce bureaucratic layers. The difference now is that large language models and AI coordination tools have matured enough to make the theoretical arguments practically executable. For professionals watching this shift, understanding the tools driving it becomes essential - resources on AI for Management offer context on how these systems are reshaping organizational design.
The Sequoia signal
The essay's co-authorship with Roelof Botha adds weight beyond one company's restructuring. Sequoia Capital is among the most influential venture firms in Silicon Valley, with a portfolio spanning the biggest names in tech. When a Sequoia managing partner puts his name on a document arguing that middle management is obsolete, it sends a signal to every founder and CEO in their network. The message is clear: the AI tools are now ready, and the organizational logic follows.
This has direct implications for how executive teams think about structural change. Resources focused on AI for Executives & Strategy can help leadership teams evaluate whether similar models make sense for their own organizations.
What the numbers suggest
The financial logic is straightforward. Fewer employees means lower operating costs. If Block can maintain or grow its output with 6,000 people instead of 10,000, the margin expansion would be significant. The company processes enormous volumes of transaction data, and that data becomes more valuable in a world model architecture where AI systems derive real-time customer insights and operational intelligence without human intermediaries.
Investors watching Block over the next several quarters should focus on two metrics: whether revenue per employee improves meaningfully, and whether product velocity - the pace at which Block ships new features and services - holds steady or accelerates.
Why this matters for managers
Dorsey is not arguing that all management is useless. The new structure retains player-coaches - senior practitioners who mentor while doing the work. What it eliminates is the role that primarily aggregates, summarizes, and relays information between layers. For anyone in a management job, the question becomes practical: how much of your week is spent on work that an AI system could route directly to the right decision-maker? The answer determines how exposed your role is to the model Block is now betting its future on.
Your membership also unlocks:
