Updating the Old Company

The old company is shrinking whether it wants to or not.

In the first three months of 2026, over 55,000 tech workers lost their jobs. Not at struggling companies. At companies posting record revenue. Amazon cut 16,000 jobs while reporting $717 billion in annual sales. Block slashed 40% of its workforce - 4,000 people - and CEO Jack Dorsey called it “a new way of working.” Meta is planning up to 15,000 cuts while doubling its AI spending to $135 billion. Oracle is reportedly eliminating up to 30,000 positions to fund AI data centers.

This follows 245,000 tech layoffs in 2025. Microsoft cut 15,000. Intel cut 15,000. Amazon cut 14,000.

These are not struggling companies making desperate moves. These are the most profitable organizations on earth deliberately restructuring around smaller teams, flatter hierarchies, and AI-augmented workflows. They are being forced toward the logic of the Cell whether they use that language or not.

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The pattern

Every one of these restructurings follows the same playbook. Cut management layers. Eliminate coordination roles. Consolidate overlapping functions. Invest in AI tools that let remaining employees do more with less.

Shopify CEO Tobi Lutke made it explicit in an internal memo: before you can hire anyone, you must prove that AI can’t do the job. Performance reviews now include how effectively employees use AI tools. Shopify has cut its workforce by 34% since 2022 while growing revenue.

Google generates over 25% of its new code through AI. Salesforce froze engineering hiring entirely. Meta’s Zuckerberg has floated the idea that AI could replace most mid-level developers. And Jack Dorsey, announcing Block’s 40% workforce reduction, said it plainly: “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.”

He’s right. He’s just not saying the uncomfortable part: the “new way of working” has no room for most of the people who built the old one.

The pattern is clear. These companies are not just trimming fat. They are fundamentally rethinking how many humans they need and what those humans should be doing. The answer, consistently, is: fewer humans, doing higher-judgment work, augmented by AI.

This is the Cell framework in action, even if nobody in these boardrooms is calling it that. Fewer people. Clearer ownership. More leverage per person. The five functions I’ve described throughout this series - strategy, execution, narrative, access, integrity - are exactly the functions these companies are trying to preserve while automating everything underneath.

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Why traditional structures resist

If the logic is so clear, why is the transition so painful? Because traditional organizational structures are designed to resist exactly this kind of change.

The traditional company is built on a simple premise: humans are the execution layer, and management exists to coordinate that execution. You need people to do the work, managers to coordinate the people, directors to coordinate the managers, and executives to coordinate the directors. This made sense for a century. It was an elegant solution to a real problem: how do you align hundreds or thousands of humans toward a common output?

Remove the execution bottleneck - which AI is doing - and every coordination layer above it loses its justification. The director who coordinated ten teams doing work that AI now handles has nothing to coordinate. The project manager who tracked dependencies between human workstreams has no workstreams to track. The middle manager who translated executive strategy into team tasks has no team.

But these people have titles, salaries, organizational authority, and political power. They will not quietly accept that their function has been automated. They will find new ways to justify their existence - creating meetings, requesting reports, building processes - all of which add coordination overhead that slows the organization down.

This is the immune response of the traditional org chart. The structure protects itself even when it’s no longer serving the mission. And the bigger the organization, the stronger the immune response. A 50-person startup can restructure in a quarter. A 50,000-person enterprise can spend years rearranging chairs while the market moves without them.

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The mental model for transition

Here’s how Cell principles map onto a traditional organization making this shift.

Identify the five functions, not the five people. Don’t start by reorganizing the org chart. Start by asking: who actually owns strategic clarity right now? Who actually makes execution happen? Who actually shapes the narrative? Who opens the doors? Who maintains integrity and governance? In most organizations, these functions are distributed across dozens of people in fragmented, overlapping ways. Nobody fully owns any of them. Map the reality first.

Find the existing Cells. Every large organization already has informal Cells operating inside it. Small teams of three to five people who actually get things done, who operate with trust and speed, who have figured out how to work around the bureaucracy. These are your proof of concept. Find them. Study how they work. Protect them from the organizational immune response that will try to absorb them back into the hierarchy.

Collapse coordination layers, not capability. The goal is not to fire everyone and hope AI fills the gap. The goal is to remove the layers that exist purely to coordinate human labor - the management overhead that was necessary when execution required large teams. Push authority down to the people closest to the work. Give them AI tools and the autonomy to use them. Eliminate the reporting structures that existed to keep humans aligned when AI can do that faster.

Make ownership explicit. The biggest disease of traditional organizations is diffused accountability. Twenty people touch a decision, nobody owns the outcome. The Cell principle that matters most for legacy companies is this: every function must have one name attached to it. Not a committee. Not a “cross-functional team.” One person who has the authority and the accountability.

Accept that the transition creates losers. This is the part nobody wants to say out loud. When you collapse coordination layers, the people in those layers lose their jobs. When you consolidate functions, the people who held fragments of those functions become redundant. When you push authority down, the people who derived power from being in the chain of command lose that power.

No framework can make this painless. The Cell doesn’t pretend otherwise. What it offers instead is a clear destination - a structure designed for the world we’re moving into, not the one we’re leaving behind.

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The three traps

Organizations attempting this transition consistently fall into three traps.

The tool trap. They buy AI tools and plug them into the existing structure, expecting transformation. It doesn’t work. Giving a seven-layer management hierarchy access to ChatGPT doesn’t make it a Cell. It makes it a seven-layer management hierarchy that uses ChatGPT. The structure must change, not just the tooling.

The halfway trap. They cut headcount but preserve the organizational structure. Fewer people doing the same jobs in the same hierarchy with the same coordination overhead. This is the worst of both worlds - less capacity to execute but the same structural friction. The people who remain are overloaded and burned out, but the fundamental design hasn’t changed.

The avoidance trap. They restructure everything except accountability. They flatten the hierarchy, they adopt AI tools, they reduce headcount - but they never answer the hard question: who owns what? Who has final authority? Who is accountable when things go wrong? Without this, you don’t have a Cell. You have a flat organization with no immune system. And flat organizations without clear authority structures are just chaos with good intentions.

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The honest assessment

The companies making headlines with massive layoffs are not implementing the Cell framework. Most of them are doing something much cruder - cutting costs and hoping AI compensates for the lost capacity. Some will succeed despite the crudeness because they have enough momentum, enough capital, enough market power to absorb the turbulence.

But crude restructuring without clear design creates its own problems. The remaining employees are overloaded, confused about ownership, and operating in structures that were designed for a workforce twice the current size. They have AI tools but no clarity about who owns what. They have fewer layers but the same diffused accountability. They have smaller teams but the same committee-driven decision-making.

The organizations that will truly thrive are the ones that treat this moment not as a cost-cutting exercise but as a structural redesign. That ask the hard questions about who owns what. That build real accountability into their new, smaller teams. That recognize the five functions are non-negotiable even if the number of people holding them drops dramatically.

The old company isn’t dying. It’s being compressed. The question is whether what emerges from that compression is designed or accidental.

In the next articles, I’ll get specific. How a startup should build its first Cell. How a mid-size company restructures around Cell principles. How an enterprise creates Cells within existing structures without tearing everything down.

The pressure is here. The direction is clear. What remains is the how.

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This is Part 6 of the Company of the Future series. Next: how different company sizes adopt the Cell - starting with the organization that has no legacy to overcome.