Inside Block’s AI-Native Organization

Like everyone, I’m very curious how AI will impact individual jobs and more importantly, company organizational models. Initially AI seemed to be affecting individual contributor roles. Now we are starting to see real innovation emerge for AI-enabled organizational design. One of the most interesting is what Block is doing under Jack Dorsey.

In February 2026, Block laid off 40% of its staff, citing gains from AI. Here's Jack's announcement:

The layoffs aren't the story. This is a public case study where a CEO is explicitly saying AI changes a company's fundamental structure. This is where AI impacts management itself.

“we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”

– Jack Dorsey, Block Head

If you want to hear more about this directly from Jack, this is worth watching:

Block is showing what it looks like to fundamentally rethink the role of AI and organization design, ultimately harnessing AI to increase speed as a compounding competitive advantage.

Traditional Organizational Models

Before we dive into what Block is doing, it helps to ground ourselves in how most companies currently operate. Most organizational design stems from the hierarchical models implemented during the industrial revolution and those models evolved from military structures. For example, the military formalized the distinction between "line" and "staff" functions. Line advances the core mission. Staff provides specialized support. Corporations still use this vocabulary today.

Management structures are designed for command and control, top-down decision making, and "vertical" information flow (e.g. up and down the hierarchy). Most companies follow a pyramid structure:

• CEO at the top
• Layers of management underneath
• Strategy/direction flowing down
• Information flowing up
• Individual contributors at the bottom

At its core, management is an information system. Layers exist to move, filter, and interpret information. Using humans introduces well-known failure modes:

• Information is filtered and/or distorted. Human managers are notorious for telling management layers above them what they want to hear.
• Managers inevitably get caught up in human concerns: risk avoidance, credit-taking, peer competition, internal politics.
• Humans have limits on span of control, which drives more layers and bureaucracy as companies scale.

Information flow can also be impeded by corporate bullsh*t, and more broadly by the inertia of enterprise despair.

Even assuming accurate, timely information traditional "managerial" strategic planning faces an existential challenge. The world is just too complex and unpredictable. Responding to such a world requires greater adaptability, and adaptability is not a characteristic of rigid strategies and top-down hierarchies. See my post: Planning vs. Reacting.

General Stanley McChrystal (command of Joint Special Operations Command "JSOC" from 2003 to 2008) recognized that hierarchical command and control organizational models could not respond in real time to what was happening on the battlefield. In his book Team of Teams he describes restructuring US forces around principles of extremely transparent information sharing (what he called “shared consciousness”) and decentralized decision-making authority (“empowered execution”).

"Adaptability, not efficiency, must become our central competency."

– General Stanley McChrystal, Tantum Collins, David Silverman, and Chris Fussell, Team of Teams

Block is experimenting with something similar; AI driving the "shared consciousness" and directly responsible individuals heading the "team of teams".

Block's "AI Native" Model

We have known for years that tools like email, slack, and internal websites (remember "portals" and "intranets"?) can replace some of the functions of management layers. Yet these tools can also be used to further individual political agendas, spread corporate bullsh*t, and over time they become a source of noise. In other words, these tools still incorporate the failure modes of human management.

We have also tried data warehouses with reporting and analysis tools layered on top, executive dashboards, etc. Generally, these attempts fell short. Data quality, timeliness, cycle time, inflexibility all contributed to their lack of success.

The real insight is that it's not just about using AI in specific use cases like software engineering. AI can directly interact with the company’s sources of truth. Support tickets. Financial data. Operational signals. AI can read and summarize thousands of ZenDesk support tickets. It can see your general ledger transactions. It can monitor channels in Slack or Teams. It can see customer interactions via Salesforce.

Instead of relying on humans to summarize reality, AI works directly on raw data. You can “talk” to your business in a way that’s closer to the truth—closer to the customer, the work, and reality itself.

Block is even attempting to build a “world model” of the business. The company’s state flows from this model, enabling better decisions, better features, and ultimately better products.

Historically, organizational cohesion came from management layers. Now it comes from an intelligence layer consuming raw data. Block’s model is not a pyramid. It’s a system. Minimal management. Clear ownership plus real-time context. In a conventional company, the intelligence is spread throughout the people and the hierarchy routes it. In this model, the intelligence lives in the system.

It's a network of humans coordinated by AI:

• Nodes, not levels. The org becomes dynamic.
• Ownership, not titles. Teams form around problems.
• Flow, not reporting. No more filtered reporting chains. Everyone works off the same context.

The Human Roles that Remain

What are the "durable human skills" that a company requires, and how are those skills expressed in roles? Here's Block's take:

0. Leader: Perhaps this role can be viewed as a specialized "directly responsible individual" but there is still a CEO/Leadership role. Jack refers to himself as the "Block Head". Durable human skills at this level are judgement, the ability to attract the right people, set values, culture, and the "tone at the top". This role also drives customer focus and execution.
1. Directly Responsible Individuals (DRIs): DRIs own outcomes. They may own customer outcomes and strategy/strategic decisions. They may be accountable for a problem being solved. Not “managers”, not “approvers”, they pull in people as needed for the mission. Authority comes from ownership, not title. The durable human skills are agency, ownership and accountability.
2. Player-Coaches (PCs): They help others get better and master their craft. They teach, guide, not control. They still do real work (because they must demonstrate mastery be respected by ICs). The durable human skill is the ability to develop human capacity with compassion and empathy.
3. Individual Contributors (ICs): They focus on execution, not navigating hierarchy. They are salespeople, builders, engineers, designers, operators, etc. Their durable human skills are judgement, taste and creativity.

Block's Key Metrics

Block is anchoring the model with a simple but powerful metric: ~$2M+ gross profit per employee (up from ~$500k pre-COVID). This is hard to game. It exposes inefficiency quickly. In Jack's view is the best measurement of "bloat" inside an organization.

They’re also compressing organizational depth:

• Maximum layers between CEO and any employee: ~5 today
• Target: 2–3 layers in the future

Fewer layers → tighter feedback loops → faster decisions.

Four Key Business "Layers"

Block sees the business as a set of composable capabilities, exposed through interfaces, enhanced by intelligence, and grounded in world models:

1. Capabilities. The things that Block can do for customers. These are like pure utilities. Card issuance, card acceptance, lending, banking, blockchain, etc.
2. Interface. The UI. Distribution. E.g. Square register, the cash app, the dashboard. It's where customers interact with and experience Block's capabilities.
3. Proactive Intelligence. Real-time understanding of customers, their activity, their pain points, etc. The intelligence layer can proactively prompt customers to alert them to things that they should pay attention to, or they might consider doing.
4. World Model. This is actually two world models: A world model for customers, where they can see all their behavior to optimize it, and a world model for the company that sees all its inputs and outputs, how it operates, risks and failure modes, etc.

Block's AI Tools/Tooling

1. Goose - Goose is an agentic harness that works on top of any model. Jack equates it to an internal Claude Code or OpenAI Codex. Think of it as a runtime for AI agents that lets agents:

   • Call tools (payments, data, APIs)
   • Manipulate CLI tools
   • Take actions (not just chat)
   • Coordinate workflows

Goose likely integrates deeply with Block’s ecosystem via internal MCP tools, APIs, data access, architectural knowledge, etc. Goose aligns with Dorsey’s vision of models that that do more than just think. Many other things are built on top of Goose. For example, Builder Bot, Manager Bot, Money Bot sit on top of Goose.

In the movie Top Gun, Goose was technically Maverick's Radar Intercept Officer (RIO) but most people think of him as the co-pilot.

New Capabilities

This model unlocks capabilities that weren’t practical before:

• Customers building features directly, within constraints. Imagine customers building their own features using Block's AI tooling. If the feature aligns with Block's strategy and Block's overall road map, go ahead and let the customer implement it at their point of need. If the feature doesn't align with Block's strategic road map, then the tooling would prevent the customer from doing so.
• Imagine an intelligence layer that sits on top of all customer care activities, a layer that's aware of all customer support calls, customer issues, and customer concerns. It can read call transcripts and can see the key issues that are generating customer care calls. It could use that information to proactively set priorities and feed that into builder bot.
• AI identifying patterns across support, usage, and operations
• Automatic prioritization of work based on real-world signals
• Shortening the loop from problem → solution dramatically
• Dynamic pricing and personalization at scale

It also shifts from roadmap-driven → customer-driven. Instead of asking “what should we build next?”, the question becomes: why does a roadmap exist at all if customer needs are visible in real time?

Block's Mindset

• Think like a frontier lab—AI is not layered on, it is the core.
• This isn’t about individuals doing more with AI—it’s about the company itself changing.
• Minimize layers. Bring everyone closer to the customer.
• Companies are not productivity problems—they are information flow problems.
• Hierarchies existed because humans couldn’t process everything. Now LLMs can.
• Replace the pyramid with a system that removes administrative overhead.
• Replace “what should we build?” with “why does a roadmap exist?”
• Put intelligence at the center, humans at the edge.
• The durable human values are agency and ownership.

Summary

AI isn’t just a productivity layer—it’s a forcing function for a new organizational model. Block is the clearest real-world example so far. They’re not just flattening the org chart. They’re trying to delete it and replace it with:

• A layer of intelligence
• A network of responsibility, coupled with coaches and players
• A much shorter distance between idea and execution

The deeper insight is that companies' key challenges are information problems. Hierarchies exist to manage information flow. Now AI can see the state of the company in real time. Shared context, or "shared consciousness", can be available to anyone, everywhere at any time.

This moment feels both exciting and uncomfortable. Block made a massive bet on the future which looks:

• Less like “AI will make people more efficient.”
• More like “AI will force companies to become something entirely different.”

References

• AP News: Fintech company Block lays off 4,000 of its 10,000 staff, citing gains from AI
• The Org: How the Rise of the Railroads Gave Way to the World's First Org Chart
• Video: On the Block #1
• Block: From Hierarchy to Intelligence