In a surprising move, Jack Dorsey's fintech company, Block, which operates Square and Cash App, has announced that it will lay off nearly half of its workforce. The decision, attributed to the increasing impact of artificial intelligence (AI) on the company's operations, will reduce the organization from over 10,000 employees to just under 6,000.
Dorsey revealed the decision in a post on X, describing it as one of the toughest calls in the company's history. "Today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000", he wrote.
Sharp changes driven by AI adoption
Despite Block reporting a strong financial quarter with growth in revenue, profit, and customer base, Dorsey pointed to AI as the primary driver behind the layoffs. He framed the decision as a necessary step in adapting to the rapid changes brought about by AI technologies.
"We're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly", he explained.
The timing of the layoffs reflects Dorsey’s decision to act decisively rather than prolong the process. "I'd rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome", he wrote.
Support for affected employees
Block has promised generous severance packages for the employees affected by the layoffs. These include 20 weeks of salary, an additional week of pay for every year of service, six months of health care coverage, and $5,000 in cash, among other benefits. However, the broader question remains: how challenging will it be for these workers to secure new jobs as automation and AI increasingly redefine industries?
A broader shift in tech's workforce
Dorsey’s remarks echo recent sentiments from other tech leaders who have pointed to AI as a disruptive force in the job market. Anthropic's Boris Cherny recently declared that "coding is largely solved", while Elon Musk predicted that AI will "replace all jobs." Meanwhile, a "thought exercise" published by Citrini speculated on a potential economic crisis by 2028 due to AI-driven job displacement.
Market response
Investors appear to back Dorsey’s bold move, as Block's stock surged nearly 30% in after-hours trading following the announcement. This positive market reaction underscores confidence in the company’s strategy to leverage AI and streamline operations for long-term growth.
As AI accelerates its influence over industries, Block’s decision signals a significant shift in how companies structure their organizations and adapt to technological advancements. However, for the thousands of employees now facing a job search, the road ahead may be less certain.
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