The new org chart
has written rules.

In the mid-1850s, Daniel McCallum was general superintendent of the New York and Erie Railroad, a system of more than 500 miles worked by thousands of people. The informal management that held smaller railroads together had stopped working, and trains were colliding. McCallum drew a chart of who reported to whom. That chart became the blueprint for the modern corporation, and most companies still run on a version of it.

I took that story from an essay Block’s co-founder and CEO Jack Dorsey published in March 2026 with Roelof Botha, a partner at Sequoia and Block’s lead independent director, called “From Hierarchy to Intelligence.” It goes back further than the railroad. A Roman legion was built from tents of eight soldiers under a decanus, ten tents to a century of eighty, six centuries to a cohort, ten cohorts to a legion of roughly 5,000. The authors call that nesting “an information routing protocol built around a simple human limitation: a leader can effectively manage somewhere between three and eight people.” The Prussian General Staff added officers whose job was to plan, process information and coordinate, which the essay calls “middle management before the term existed.” West Point engineers carried that thinking into the railroads, and McCallum put it on paper.

The point of the history is what the layers were for. For two thousand years, every layer of management existed to carry information up, carry decisions down and keep units aligned, because a person can only keep track of a handful of other people. Most of what a manager does in a large company today is still that routing work. When software can hold a running picture of what is being built, what is blocked and where the money goes, a large share of that work moves into the system. Block’s essay says exactly that: “The question was never whether you needed layers. The question was whether humans were the only option for what those layers do.”

That is a big claim from a CEO with an interest in it. What makes it worth reading is that several CEOs have now written down, in public, what they are actually changing.

Four companies wrote down the new rules

Fiverr went first. In September 2025 Micha Kaufman, Fiverr’s founder and CEO, sent his staff a memo titled “Fiverr is going back to startup mode.”

Today, we are launching such a transformation for Fiverr, to turn Fiverr into an AI-first company that's leaner, faster, with a modern AI-focused tech infrastructure, a smaller team, each with substantially greater productivity, and far fewer management layers.

In February 2026 Block followed with a note to the whole company about “smaller and flatter teams.” A month later came the essay, which spells out the structure: a company world model built from the artifacts of a remote-first company, an intelligence layer on top, and people at the edge in three roles. In May Brian Armstrong, the co-founder and CEO of Coinbase, emailed everyone there that the company would be rebuilt “as an intelligence, with humans around the edge aligning it.” In June Boris Cherny, who leads Claude Code at Anthropic, described the roles he sees on his own team.

Read side by side, the documents agree on more than I expected. Five rules come up again and again.

1. Fewer layers, wider spans. Coinbase is moving to “5 layers max below CEO/COO,” with leaders carrying “as many as 15+ direct reports.” Armstrong’s reason: “Layers slow things down and create coordination tax.” Fiverr asks for “far fewer management layers.”
2. Every manager also builds. Coinbase: “No pure managers: Every leader at Coinbase must also be a strong and active individual contributor.” Block’s version is the player-coach, who “still writes code or builds models or designs interfaces” and also develops the people around them.
3. One person owns each problem. Block’s Directly Responsible Individual “might own the problem of merchant churn in a specific segment for 90 days, with full authority to pull resources” from other teams.
4. Roles stop following job titles. Coinbase is testing “one person teams” with “engineers, designers, and product managers all in one role.” Cherny sees five archetypes, “Prototyper, Builder, Sweeper, Grower, Maintainer,” and notes they “are not really tied to job function.”
5. The system carries the context. In Block’s model, the world model replaces “the information that used to flow through layers of management,” so people at the edge can act without waiting for it to travel up and down.

These are concrete. You can hold a current org chart next to them and count. How many layers sit between the person talking to the customer and the person who can say yes? How many managers spend their week relaying status? Who owns the churn problem, by name, for the next quarter?

Most of these memos were also layoffs

Each of these documents is also a goodbye letter, and I do not want to read the org design and skip that part.

4,000+

People asked to leave or entering consultation at Block, from over 10,000 to just under 6,000.

~14%

Of Coinbase, cut in May 2026.

~250

Team members leaving Fiverr in September 2025.

The reasons differ, and the differences matter. Dorsey wrote that Block was “not making this decision because we’re in trouble. our business is strong.” Armstrong named two forces, and the first was the market: “we’re currently in a down market and need to adjust our cost structure now.” AI was the second. Anyone citing Coinbase as proof that AI flattens companies should say that the cut also came in a crypto downturn.

The way the cuts were handled differs too. Dorsey kept Slack and email open so people could say goodbye, and wrote: “i’d rather it feel awkward and human than efficient and cold.” Kaufman paired the reduction with “upskilling our existing team.” Even the authors of the essay admit they have not finished the job yet.

Block is in the early stages of this transition. It will be a difficult one, and parts of it will likely break before they work.

The cautionary case is a year older

In 2024 Klarna said its customer service chatbot did the work of 700 human agents. In May 2025 its CEO, Sebastian Siemiatkowski, told Bloomberg the company was recruiting people again so customers always have a human to talk to.

As cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality.

This was a partial reversal. A Klarna spokesperson told Fortune the company still was not replacing people who left, apart from freelance support agents, and was “very much still AI-first.” The lesson I take from it is narrow and useful: when cost is the only thing you measure, quality is what you lose, and customers notice before the dashboard does.

Anthropic made the same warning in more formal terms this month, in its study of its own workforce. Agent hours there now outnumber human hours 6 to 1, and the report still makes the case for moving people into new work.

Employers replace human workers, imposing substantial social costs in lost income for displaced workers, while delivering minimal productivity benefits.Anthropic on “so-so” automation, How employment is changing at Anthropic

The report describes what the alternative looks like inside one company. Employees who had been there at least a year were 50% more likely to move across departments each month in 2026 than in 2025, and whole teams were reallocated after handing their work to agents. Prioritizing reallocation, the authors write, “forces AI-adopting companies to consider ways that AI can create new tasks for new products and new markets.”

Redesign should create capacity first

My position is simple. The five rules above are good rules, and I would put versions of them in front of any leadership team. Fewer layers, builders who manage, one owner per problem and shared context make a company faster. What I would change is the order of operations.

When a team stops spending its week routing information, it gets hours back. The first decision is what to do with those hours: the backlog nobody had time for, the market you never entered, the customers who waited too long for an answer. Cutting is the last option on that list, and if it comes first, you find out later which knowledge walked out with the people who left. Dorsey said as much about his own review: “i accept that we may have gotten some of them wrong.”

The people side decides whether any of this works. Concretely, that means three things before the new chart goes live. Each new role gets written down, with what the person owns, what they decide and what they hand to agents, because a player-coach without a clear brief drifts back into managing. The people affected get consulted before the design is final, since they know where the real work happens and the chart usually does not. And the training starts before the switch, so that the people expected to run agents have done it on their own work first.

The CEOs in this note wrote their rules down and published them, which makes them easy to argue with. If you are redrawing your own chart, I would do the same: write the rules, show them to the people they affect, and change them when they say something you missed.