According to information from Reminder, billionaire Jack Dorsey has decided to reduce his staff by 40%, which has positively impacted the market value of his company.
In an article published on March 31 on the website of the fintech company Block, which he founded and leads, Dorsey, along with venture capitalist Rulof Bot, claims that artificial intelligence can take the place of middle managers.
In February of this year, Dorsey announced a reduction of Block's workforce by more than 4,000 employees — about 40% of the total number of workers. He noted that the layoffs are not related to the company's financial difficulties but are part of a transition to a new work format, which involves the use of AI in conjunction with a reduction in staff. As a result, Block's shares rose by 24% after this announcement.
The authors of the article emphasize that the traditional structure of most companies is pyramid-shaped: information flows from employees to managers and then to executives, after which decisions are sent back down. However, according to Dorsey and Bot, this function can now be performed by artificial intelligence.
“At Block, we challenge the traditional notion that organizations should be hierarchical and that coordination should be carried out by a person. Our goal is to replace this hierarchy. Many companies implementing AI provide workers only with auxiliary tools, which only slightly improve existing processes,” they note.
The authors also emphasize that Block operates in a remote work mode, where all discussions, decisions, and issues are recorded as documented actions. Artificial intelligence is capable of collecting and analyzing this information, creating a “model of the company's world.” “In a traditional organization, a manager must be aware of what is happening in the team and relay information up and down the hierarchy. In a remote company, processes become available for machine analysis, and AI can continuously update information about the current state of affairs,” they add.
The same applies to clients: Block collects data on millions of transactions daily, which can serve as the basis for creating a “model of the client's world.” “The combination of the model of the company's world and the model of the client's world could form the basis for a completely new type of company,” conclude Dorsey and Bot.
The record "Artificial intelligence can replace middle managers — billionaire Jack Dorsey" was first published on the K-News website.
