I don't think this is a good idea. In my experience, people customize their working spaces to best fit their style over time. Within those spaces, they feel comfortable, and are able to get into the mental groove needed to get their jobs done.
By removing the stability of having a place to call their own, you're introducing more stress into their work-lives.
Will that spot I like be available again?
Will that one guy who never shuts up sit next to me again?
Will I lost my spot if I go out for lunch?
It's a bit like trying to get the best parking spot, except it's far more likely to cause friction between your employees.
You would be operating much like a library, yes, except a library is not a place where you're expected to be for 8 hours a day, 5 days a week, 50-ish weeks a year. In a library you don't have the expectation of getting the best spot, and thus resign yourself to simply getting some work done in peace and quiet.
At work your expectations are completely different. And introducing a daily competition for prime work-spaces is, in my opinion, going to cause enmity among employees, destroy team cohesion, and kill morale.
Some companies do use this sort of arrangement, where they give employees laptops, and let them sit wherever they choose in the office. This arrangement might be well suited to some businesses, and if your employees are younger, millennial types. However, not everyone is going to react well to this, and you are also going to lose out on talent because of your quirky arrangement. I'd like to offer a personal example:
I'm a guy who enjoys working in peace and quiet. I don't shy away from social interaction, and do find I crave it, but prefer to be the one to initiate it, not have it thrust upon me, randomly. As such, I value my privacy, and like having a cubicle where I can sort of "seal myself in", and focus on my work. Last year I interviewed with a company in Toronto whose offices were located in a former factory's great hall. Everyone worked at, essentially, folding tables, in rows going back all the way to the end of the hall, maybe 20 of them to a row. The sales team would be on the phone at the front, while the developers were all slumped in their chairs, headphones over their ears, trying to pretend that the world around them doesn't exist, and failing. I hated it from the second I set foot through the door, and almost walked out right there and then.
Consider your employee's culture and age group before making these sort of sweeping changes. Maybe prepare an employee survey, and ask them about what sort of seating arrangement they would prefer before making sweeping changes.
I would speak to your boss and ask him what his goals are in doing all this. Modernizing the workplace? Saving on furniture? Engaging the team? Once you know what he's trying to accomplish, try giving your employees a choice in all this. This will feel that they have a say in how things are done, and will most certainly boost both morale, and engagement.
A word of warning, however: if you do ask them what they want, then blatantly ignore it, then that will hurt morale.