AI Is Coming for Your Manager

54% of Democrats think an 8-year-old boy could beat Donald Trump in a fight. Only 6% of Republicans think the same. Middle management is the new target of AI cost-cutting Ken Griffin vs. Zohran Mamdani: The pied-à-terre tax fight, explained GLP-1 drugs are coming for big alcohol Today at 10 a.m. ET, Scott and Ed are going live with Professor Aswath Damodaran. On tap: Big Tech earnings, the SpaceX IPO, OpenAI vs. Anthropic, and the market’s disconnect from the Iran war. Prof G+ subscribers get access to the livestream and can submit questions. Register here. The conversation around AI and jobs is evolving. It’s no longer just about AI replacing individual workers — company leaders are starting to suggest that AI could eliminate layers of management, or even managers entirely. Last week, Coinbase CEO Brian Armstrong announced plans to cut roughly 14% of staff. He blamed challenging market conditions, reinforced by the company’s dismal first quarter earnings in which revenue plunged 31% — but also AI. Specifically, Armstrong said that the restructuring was designed to eliminate “pure” managers. Last year, Microsoft laid off 6,800 employees, citing AI and an effort to become more streamlined and have fewer managers. Perhaps the clearest expression of this new thinking came from Jack Dorsey, who, in a blog post about his company, Block, wrote: “For the first time, a system can maintain a continuously updated model of an entire business and use it to coordinate work in ways that previously required humans relaying information through layers of management.” Eliminating managers has become the go-to solution for companies looking to prove returns on their AI investments. Gartner projects that 1 in 5 companies will eliminate more than half their middle managers by the end of this year. Every generation of executives has a fever dream of flattening the organization. The version from the 1980s was called Reengineering. But the truth is, management is the connective tissue in any organization. A lot of companies are about to discover that institutional memory was not inefficiency, it was the f*cking company. This was the subject of my No Mercy / No Malice post last week. We work to create economic prosperity and shareholder value, sure. But the whole shooting match of work is you have the opportunity to build something with someone else. The most rewarding thing in life is relationships, and the things that fuse relationships are building things together. If you take away coworkers, it’s like you’ve literally sucked the soul and humanity around what it means to work. Does that mean there aren’t cases where management layers become fat and add negative value? No. But I actually think this is one place where AI is absolutely not going to live up to the hype. AI is not going to replace management and mentoring. What’s really happening here is that a group of CEOs who overhired want to juice their valuations. Brian Armstrong articulated his vision pretty clearly in his email to employees. The goal isn’t just cutting head count, it’s rebuilding the entire company around AI with humans managing agents rather than managing each other. Sam Altman, Dario Amodei, and others have been pushing the same idea: the one-person billion-dollar company, where a single person manages fleets of AI agents that do everything for them. They’re just glorifying how much value and power you can put into one person’s hands. I don’t think it’s going to work, and not because it can’t technically, but because people don’t actually want it. You don’t spend years building something meaningful and then celebrate alone with your AI agents. Sam Altman said AI consumes less energy than human beings and children. That framing tells you everything about where this thinking has gone wrong. The wealth tax debate is escalating. Billionaire investor and Citadel CEO Ken Griffin is now publicly feuding with New York City Mayor Zohran Mamdani over a proposed pied-à-terre tax. If passed, it would levy a new annual fee on properties worth more than $5 million that are not used as a primary residence. The tax, which New York Gov. Kathy Hochul has included in the state’s tentative budget, would raise approximately $500 million annually, per the city comptroller. Montana and Florida are also reportedly exploring measures that would increase taxes on second homes. I own a pied-à-terre in New York. Under this tax, it would cost me an additional $100,000 per year. I’m in favor of it anyway. Property taxes are the largest source of revenue in New York City, and they work. Unlike income taxes, which chase high earners to Florida and Texas, taxing real estate tends to raise revenue before it drives people out. A second home worth $10 million sitting empty adds nothing to the city’s tax base and removes housing supply, which drives up prices for everyone else. If it cost me another $100,000 to have a second home in New York, I don’t love it. But here’s the bottom line: If I can go to Jack’s Wife Freda and watch all the hot men and women and the world pass me by, and then I can go out for the best food in the world and walk around looking at the absolute wondrous freak show that is New York, f*cking A, I’m not going anywhere. It is the pinnacle of America, the greatest collision of culture, commerce, creativity, fashion, art, and media. People who own second homes in New York will spend a lot more than that to stay and be witness to that amazing experiment. No one likes taxes, but I hate this tax less than any other idea. But here is where Mamdani made a real mistake: He announced the pied-à-terre tax right in front of Ken Griffin’s building. Griffin has given $650 million to New York charities. He’s planning a multi-billion-dollar development project he’s now considering putting on hold. His only crime here is being very wealthy in New York. That’s not a crime. Folks, let me be clear, most billionaires are really good people. Some are OK, and some are bad. Most poor people are really good people. Some are OK, and some are bad. The demonization of rich people and the demonization of success is how we get JD Vance as president. The pied-à-terre tax is the right policy tool. It’s so funny to hear the argument where people say, if you add additional taxes, these billionaires are going to leave. And it’s like, brother — they already have. It’s their second home that we’re talking about. They’re not New York residents. Their income isn’t being taxed in the city. Their empty apartments just inflate the price of housing for everyone who actually lives there. 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