Jack Dorsey’s company Block plans to lay off 4,000 employees, nearly half of its workforce, citing increased productivity from artificial intelligence tools.
Block, the financial technology company founded by former Twitter CEO Jack Dorsey, has announced plans to lay off 4,000 of its 10,000 employees. This decision is attributed to advancements in artificial intelligence (AI) that have significantly enhanced productivity within the company.
In a letter to shareholders on Thursday, Dorsey emphasized the transformative impact of AI on business operations. “Intelligence tools have changed what it means to build and run a company,” he stated. “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.”
Despite the substantial layoffs, Dorsey assured stakeholders that the decision was not a reflection of financial instability. He pointed out that Block had performed well, exceeding Wall Street expectations with a reported total revenue of $6.25 billion for the fourth quarter. In a post on X, he explained that he faced two options: to gradually reduce the workforce over an extended period or to act decisively in the present.
“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.
During the earnings call, executives noted that Block had been increasingly integrating AI into its operations for several years. They indicated that some AI initiatives were nearing full implementation, while others were still in earlier stages of development. This announcement follows a previous round of layoffs earlier in February, which had already seen hundreds of workers let go.
The decision to reduce the workforce by nearly half has drawn comparisons to the drastic measures taken by Elon Musk when he acquired Twitter (now X) in November 2022, where he cut approximately 50% of the staff in a single move. Dorsey, a co-founder of Twitter, has had a complex relationship with Musk, initially supporting his acquisition but later suggesting that Musk “should have walked away.”
In addition to his role at Block, Dorsey has been involved in the development of Bluesky, a decentralized alternative to Twitter, and has expressed strong support for Bitcoin.
The layoffs at Block have reignited discussions about the broader implications of AI on employment. Tech leaders, including Anthropic CEO Dario Amodei and Meta CEO Mark Zuckerberg, have raised concerns about the potential negative effects of AI on the workforce. A recent report from the research firm Citrini, released on February 22, outlined a scenario where the growth of AI could adversely affect the overall economy.
Conversely, some industry figures have cautioned against hastily attributing layoffs to AI. OpenAI CEO Sam Altman has pointed out that some companies may be “AI washing,” or misleadingly linking unrelated layoffs to advancements in AI technology.
Critics on X have challenged Dorsey’s narrative regarding the layoffs at Block. One user highlighted that the company’s workforce had more than tripled from 3,900 to 12,500 employees between December 2019 and December 2022, during the tech boom fueled by the pandemic. “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 suggested that Block had created “two parallel company structures during COVID” and was now consolidating them, framing the layoffs as a management correction rather than a revolutionary shift driven by AI. This user predicted that more companies might use “AI restructuring” as a pretext for decisions that were already in the works.
The developments at Block reflect ongoing tensions in the tech industry regarding the role of AI in shaping the future of work and the management strategies employed by companies navigating these changes. As the conversation continues, the implications for employees and the economy remain a focal point of concern.
According to The American Bazaar, the situation at Block serves as a critical case study in the evolving landscape of technology and employment.