Jack Dorsey has defended his company’s decision to eliminate roughly 4,000 positions, arguing the move was not driven by a desire to reduce costs but rather represents a fundamental and lasting reorganisation of how the business operates. The cuts affect approximately 4,000 of the company’s more than 10,000 employees. Dorsey frames the change as a deliberate shift away from traditional management layers in favour of artificial intelligence systems.
According to Dorsey, the restructuring was prompted by a capability shift he observed in December, when he assessed the performance of several AI tools. He specifically cited Anthropic‘s Opus 4.6 and OpenAI‘s Codex 5.3 as examples of systems he concluded had become capable of functioning effectively within large codebases. That assessment, he says, convinced him the moment had arrived to rethink how the organisation is structured.
Central to Dorsey’s argument is a view about why corporate hierarchies exist in the first place. He contends that management layers have historically served a single purpose: routing information through organisations too large for any one person to monitor or control. In his view, artificial intelligence is now capable of performing that function, making traditional middle management structures redundant.
The decision to remove thousands of roles on those grounds marks a significant departure from how companies have typically justified workforce reductions. Businesses have more commonly cited financial pressures, declining revenues, or the need to streamline operations when announcing large-scale layoffs. Dorsey’s framing positions the cuts as a structural evolution rather than a response to economic conditions.
The move raises broader questions about how AI adoption may reshape corporate workforces across industries. If the reasoning Dorsey outlines gains traction among other technology executives, similar restructurings could follow at other firms that rely heavily on engineering and management hierarchies. The extent to which AI tools can genuinely replace coordination and oversight roles remains a subject of active debate in the technology sector.
Originally reported by CoinDesk.
