I have tried it and it seems to work. I got near the end of the game and set the governor settings for conquered cities and automated conquered workers. My idea was that they would make sure my cities weren't working unimproved tiles, and I would follow up with my worker groups later to fix the cities. I found that the AI seemed to do a decent job, I didn't have to correct much. I was impressed, so I tried just automating my workers next game after I felt my start was going pretty well, and the results were not as good.
I am not sure what was up with it. My guess is that the auto workers may follow governer settings on cities that have decent pop and some buildings, in other words cities I just conquered. But for new cities they seemed to just build farms when I wanted cottages (I selected focus on commerce). I assume that if I allowed them to replace improvements, they would farm the city till it grew, then replace them with cottages, but I don'tr trust the AI to replace improvements.
Edit: I just may test this, set my self up with an automated start, set the governer settings and let them do replacements and see if they change the improvements as the cities grow. However, only after I install that betterAI mod I read about, they said something about fixing a bug that caused workers to bulldoze towns.