Last Updated on May 2, 2026 by Taya Ziv
Last month, Jack Dorsey fired 4,000 people at Block. Not because the company was failing. Revenue was fine. Growth was fine. He fired them because he believes the entire concept of middle management is obsolete.
Then he and Sequoia’s Roelof Botha sat down and wrote an essay about it. Their argument, boiled down: AI can now do what managers were hired to do. Aggregate information. Track progress. Maintain context across teams. Coordinate execution. The human in the middle, the one who sits in meetings all day and summarizes what happened for the person above them, that person is being automated out of existence.
And before you think this is just Dorsey being Dorsey, look around. Amazon cut 14,000 corporate employees specifically to “remove organizational layers.” Meta restructured its AI division into “pods” with a 50-to-1 employee-to-manager ratio. Gartner now predicts that 20% of organizations will use AI to eliminate more than half of their middle management positions by the end of this year.
This is not a future prediction. This is happening right now, across the biggest companies on earth, simultaneously.
So what does this have to do with your startup?
Everything.
Because the org chart you were planning to build? The one where you raise your Series A, hire a VP of Engineering, who hires two directors, who each hire three team leads, who manage six engineers? That org chart is dead.
Block is replacing managers with what they call “player-coaches,” people who still build, still write code, still design, but also develop the people around them. No more full-time meeting-sitters. No more human routers who exist only to pass information up and down a hierarchy.
Meta is doing something similar with their new titles: “AI builder,” “pod lead,” “org lead.” Notice what’s missing? “Manager” is not on that list.
And here is the part that should actually make you sit up. VCs are watching this. The investors who were already skeptical about bloated Series A hiring strategies are now actively favoring startups that operate with flatter structures from day one. If your pitch deck shows 40 employees by month 18, somebody is going to ask why 12 of them are managers.
The real signal behind the numbers
Let me put some numbers on this so it does not feel abstract.
In the first four months of 2026, tech companies cut more than 73,000 jobs across 95 companies. Almost every single one cited AI restructuring as the primary driver. But here is the thing that makes this different from the 2022 layoff wave: the companies doing the cutting are reporting record revenues at the same time.
Meta’s revenue is up. Amazon’s cloud business is printing money. Block’s transaction volume is growing. These are not cuts born from desperation. They are cuts born from a conviction that AI coordination tools can replace the humans who used to do the coordinating.
Block’s new structure has three roles. Individual contributors who build. Directly responsible individuals who own outcomes on 90-day cycles. And player-coaches who build alongside their teams while developing people. That is it. Three roles. No management ladder.
Dorsey and Botha described their vision as two AI “world models.” The first one aggregates all internal data, code, decisions, workflows, performance metrics, into a continuously updated picture of what the company is actually doing. The second one manages the external picture, market, competition, and customer signals. Together, these two models replace the context that managers traditionally carried in their heads and shared in those weekly status meetings that everyone hates.
Why this is actually good news for founders
I know this might sound scary if you are building a team right now. But actually, this is the biggest structural advantage startups have had in years.
Think about it. The entire reason big companies needed middle management was scale. When you have 10,000 people, somebody has to coordinate. Somebody has to make sure Team A knows what Team B is doing. Somebody has to translate the CEO’s vision into something the engineer on the third floor can actually execute on.
Startups never needed that. A 10-person startup does not need three layers of management. But the problem was, the moment you grew past 30 or 40 people, you had to start building those layers. You had to hire the VP, the directors, the leads. And suddenly your scrappy team started moving like a Fortune 500 company, slowly and by committee.
AI coordination tools are removing that ceiling. A 10-person team that uses AI for context-sharing, task routing, performance tracking, and cross-team communication can now operate with the coherence of a 50-person org. You can stay flat longer. You can stay fast longer. You can delay the bureaucracy tax that kills startups from the inside.
That is not a small thing. That might be the most important operational shift since Slack replaced email threads.
What to actually do about this
If you are a founder hiring right now, here is what I would think about.
First, stop hiring coordinators. If someone’s primary job is going to be sitting in meetings, synthesizing information, and reporting upward, that job is being automated. Hire builders. Hire people who produce things, code, designs, copy, research, deals. Not people who manage the people who produce things.
Second, invest in AI coordination infrastructure before you invest in management layers. Tools like Linear, Notion AI, and custom internal dashboards powered by LLMs can handle 80% of what a project manager used to do. Status updates, dependency tracking, blocker escalation, context summaries. A $50/month AI tool does this better than a $150,000/year hire.
Third, rethink your hiring plan. If your fundraise pitch includes headcount projections that look like a traditional org chart, update it. Show investors a flat structure with AI tooling. Show them you can do more with fewer people. Because that is what the entire market is moving toward, and VCs know it.
Fourth, look at Block’s model seriously. Player-coaches who build and develop people simultaneously. 90-day ownership cycles with clear DRIs. No permanent management positions. You do not have to copy it exactly, but the direction is clear: everyone builds, nobody just manages.
The uncomfortable truth
I have spent my career telling founders to hire great people and get out of their way. That advice still holds. But “great people” no longer includes professional meeting-attenders. The person who was invaluable in 2020 because they could hold context across five teams and three time zones, that person is being replaced by a dashboard and an AI summary.
Is that a little cold? Maybe. But founding a company was never about being comfortable. It was about building something that works. And right now, what works is flat teams, AI coordination, and every single person on your payroll producing something tangible every day.
The middle manager had a good run. But the death certificate has been signed by Jack Dorsey, Roelof Botha, Andy Jassy, Mark Zuckerberg, and a Gartner report. If the biggest and most successful companies on earth are saying they do not need them anymore, maybe, just maybe, your 12-person startup does not need them either.
