Jack Dorsey’s company Block, which operates payment apps Square, Tidal, and Cash App said it would be laying off 4,000 of its 10,000 employees because of gains in AI productivity.
“Intelligence tools have changed what it means to build and run a company,” Dorsey, Block’s CEO, said in a letter to shareholders on Thursday. “We’re already seeing it internally. A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week.
On Thursday, Dorsey claimed that he decision to almost halve Block’s workforce wasn’t because the business was in trouble, and that economic performance had actually been strong. Block beat Wall Street expectations for its fourth quarter, reporting $6.25 billion in total revenue. He also said on X that he had two choices: gradually cut his workforce over months and years – “or be honest about where we are and act on it now.”
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“Repeated rounds of cuts are destructive to morale, to focus and to the trust that customers and shareholders place in our ability to lead,” Dorsey wrote.
Executives had said on Thursday’s earnings call that the company had been increasing its reliance on AI for years, noting that some AI work streams were “nearly fully rolled out, others are earlier in their maturity.” Block had already laid off hundreds of workers in early February.
While the move of cutting almost half the workforce seems drastic, it isn’t without precedent. In November 2022, Elon Musk slashed roughly 50% of Twitter’s staff in a single stroke after taking the company private, in a move that shocked much of Silicon Valley. Dorsey was a co-founder of Twitter (now X), and had a complicated relationship with Musk who bought the company.
Dorsey had initially championed Musk’s Twitter acquisition, then said Musk “should have walked away.” He helped launch Bluesky, the decentralized Twitter alternative, then quit its board and called X “freedom technology.” Both are also vocal Bitcoin advocates.
Block’s layoffs have fueled ongoing concerns about the impact of AI on the workforce. Tech leaders like Anthropic CEO Dario Amodei and Meta CEO Mark Zuckerberg have already sounded the alarm about this, and a viral report from research firm Citrini on Feb. 22 has also caused much concern. Citrini, a firm focused on thematic equity investing, laid out a predictive scenario in which AI continues to grow but proves detrimental to the broader economy.
However, others have pushed back on this. OpenAI CEO Sam Altman recently mentioned that companies were “AI washing,” or falsely linking unrelated layoffs to AI.
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Critics on X have challenged Dorsey’s framing of the Block layoffs. One X user noted that between December 2019 and December 2022, Block more than tripled its headcount from 3,900 to 12,500 employees during the pandemic-era tech boom. “Unwinding less than half an insane COVID overhiring binge has much more to do with Jack Dorsey’s managerial incompetence than whether AI is going to take your job,” the post read.
Another commenter said Block built “two parallel company structures during COVID and is now collapsing them,” calling the move a management correction rather than an AI revolution. He predicted more companies would use “AI restructuring” as cover for decisions already in motion.