Two months after cutting 40% of Block’s workforce, Jack Dorsey published the intellectual justification. It’s an essay co-written with Sequoia managing partner Roelof Botha called From Hierarchy to Intelligence, and it argues something more aggressive than the usual “AI will replace jobs” talking point. Hierarchy itself, they claim, is obsolete.
The argument hinges on a distinction worth taking seriously. Dorsey and Botha separate two things managers actually do: making decisions, and routing information. Corporate hierarchy, they argue, wasn’t built for the first — it was built because a human can only track somewhere between three and eight people at once. Every layer above that exists to pass context up and orders down. The Roman legion figured this out. The modern org chart inherited it.
Their claim is that the entire relay system can be replaced by AI-maintained “world models” — continuously updated representations of every decision, Slack thread, Jira ticket, and customer transaction inside a company. In Block’s version, only a few roles survive. Individual contributors build the system. “Directly responsible individuals” own specific outcomes on 90-day cycles. “Player-coaches” stay hands-on while developing people. Middle managers, as a class, disappear.
Block is actually building it. The company is reorganizing around four layers: atomic financial capabilities, dual world models (one for internal operations, one for customers), an AI intelligence layer that composes services without a product manager involved, and interface surfaces like Square and Cash App. Employees now send Dorsey a weekly five-accomplishment email, which he processes using AI. AI fluency is part of performance reviews.
The thesis has one real problem: every previous attempt to flatten the org chart has broken on the same reef. Ricardo Semler’s Semco got a bestseller out of radical self-management but nobody successfully copied it. Zappos adopted Holacracy in 2014; by 2016 about 260 employees had left, and the company has since quietly brought back managers. Harvard Business Review concluded that flat structures speed creative decisions but slow implementation ones — the opposite of what Dorsey promises. Informal hierarchy tends to fill any vacuum left by the formal kind.
What’s supposed to be different this time is the AI. Inside Block, the tools aren’t quite there. Fortune reported that roughly 95% of AI-generated code changes at the company still need human modification, and the system can’t yet operate unsupervised in regulated areas like payments and lending. Internal morale is reportedly the worst in four years. Bloomberg ran its coverage of the layoffs under the blunt headline AI-washing.
There’s a cleaner read on what’s happening here. Block is running a cost-cutting experiment and giving it a philosophical superstructure. That doesn’t make the experiment uninteresting — the “world model” framing is sharper than most AI management literature. It just makes the confident predictions suspect. Dorsey told employees the majority of companies will follow within a year. What has actually arrived, by Fortune’s account, is duller: the “megamanager era,” where the average manager now has nearly twice the direct reports they had in 2013, and burnout is compounding.
The honest version of the essay would end there. Dorsey’s doesn’t.
Sources: Sequoia Capital · Fortune · Bloomberg · Harvard Business Review · CNN Business
This article is AI-generated.
