Jack Dorsey says AI is driving Block's massive layoffs as 4,000+ roles are cut

midian182

midian182

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What just happened? Jack Dorsey, the co-founder and former CEO of Twitter, is eliminating over 4,000 jobs at his payments company, Block. In a depressingly familiar repeat of what we've previously seen, the move is a result of increased AI integration across the firm.

Block, which Dorsey founded in 2009, is the US market leader in point-of-sale systems. It operates Square, Cash App, and Tidal, boasting over 60 million users.

Dorsey announced on Thursday that almost half of Block's global workforce are being laid off, reducing its headcount from around 10,000 to just under 6,000.

In his X post revealing the cuts, Dorsey said the decision has not been made because Block is in trouble – he noted that profits and customer numbers continue to grow. The primary reason is AI adoption.

"Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. A significantly smaller team using the tools can do more and do it better," Dorsey wrote.

The CEO said that he could have made multiple cuts over months and years as the shift to AI automation continues, but argued that this would be bad for morale – though cutting half the global staff in one swoop won't feel great for those affected, either.

Dorsey predicted that most companies will have made large headcount reductions due to AI adoption within a year. "I'd rather get there honestly and on our own terms than be forced into it reactively," he said.

Something else we usually see when a company announces AI-related layoffs is a positive response from investors. Block's move had a similar reaction: its share price was up more than 24% in after-hours trading.

Dorsey apologized to those being let go. He said that they made the company what it is today and he will honor that fact forever – but not by letting them keep their jobs, obviously.

Those being laid off will receive 20 weeks of salary plus 1 week per year of tenure, equity vested through the end of May, 6 months of health care, their corporate devices, and $5,000 to put toward whatever they need to help them during the transition. Block said it expects to incur roughly $450 million to $500 million in restructuring charges.

Block forecast gross profit would rise 22% from a year earlier to $2.80 billion during the first quarter. It also raised its 2026 gross profit growth forecast to 18% from a preliminary view of 17%.

Several tech giants have made mass layoffs and blamed AI for them recently, though some believe the technology is being made a scapegoat in many of these cases.

Earlier this week, Goldman Sachs said AI's impact on the US economy was "basically zero" last year. This followed several reports showing most companies aren't seeing financial returns as a result of AI adoption.

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Jack Dorsey says AI is driving Block's massive layoffs as 4,000+ roles are cut

 
20% higher profits with half the workforce ... and yet the AI naysayers will still continue to claim "AI doesn't work!".
 
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Theinsanegamer said:
Because none of these claimed profit increases are sustained, often they never actually show up.
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Most of these AI profits are paid for with money that doesn't exist and companies are trying to cull the herd before the crash.

The over hired to limit their competition's access to talent, creating artificial demand in the job market, leaning tons of people hanging with student loan debt and now they're blaming AI for why they are laying everyone off. There are CEOs that are flat out saying the AI layoffs are a lie and now you have banks saying they are limiting AI companies access to capital.

We have to start aiming the money printers away from the money furnaces. It would be one thing if the AI companies were saying "we need this much hardware for this much product to work and this with how we will monetize it" but we don't have a business model from these companies yet.

The only current functional business model is making survallence tech and weapon systems for the government and that's funded with money printers, too.
 
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A 40% reduction is large but Square/Block is an electronic payment processing app. You don't get much more automated than that. I'm more surprised they had 10,000 employees to start with.

That aside, the thing most people are missing is that those 4000 people can now go out and do another job which from a societal point of view means more goods and services for everyone. The guy with the shovel replaced by the bulldozer now is freed up to mow lawns (or get better skills and do something else).

Productivity tech is how we moved from the middle ages to the cushy lives we have now.
 
Endymio said:
20% higher profits with half the workforce ... and yet the AI naysayers will still continue to claim "AI doesn't work!".
Click to expand...
Is firing 20% of your workforce 'working' for you? Is there any point at which you put social conscience and decency ahead of a nihilistic love of money and blind self-interest?
 
OortCloud said:
Is firing 20% of your workforce 'working' for you? Is there any point at which you put social conscience and decency ahead of a nihilistic love of money and blind self-interest?
Click to expand...
It's closer to 40%, actually. And you have things backwards. If blindly employing superfluous workers with no thought to need or efficiency was an ethical economic model, nations like Cuba and the former Soviet Republics would be consumer paradises, rather than hell-holes from which people flee whenever given the opportunity.

ScottSoapbox said:
They haven't even run the company for a day on half the workforce let alone when they made their profits last quarter. So try for more meaningful comparisons.
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When we return here a year from now, and Block is thriving even more than today, will you admit you're wrong? They've been using the AI tools a while now, and they've obviously already done the work-study analyses showing a large proportion of underutilized labor.
 
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Interesting that Goldman just said AI’s macro impact was basically zero last year, yet it’s powerful enough to justify halving a workforce. Either AI is transformative overnight, or it’s the cleanest cost-cutting narrative we’ve ever seen.
 
The part where he says it’s kinder to cut half the company in one swing instead of gradually is such a 2026 CEO take. Rip the band-aid off by removing the entire arm.
 
Dorksey--one of the pillars of free speech killers(for one side). Nice to see him doing some damage to his own kiind.
 
ScottSoapbox said:
A 40% reduction is large but Square/Block is an electronic payment processing app. You don't get much more automated than that. I'm more surprised they had 10,000 employees to start with.

That aside, the thing most people are missing is that those 4000 people can now go out and do another job which from a societal point of view means more goods and services for everyone. The guy with the shovel replaced by the bulldozer now is freed up to mow lawns (or get better skills and do something else).

Productivity tech is how we moved from the middle ages to the cushy lives we have now.
Click to expand...
But if the jobs are all automated, theres nowhere for those people to go. Now you have created negative pressure on wages, reducing the buying power of the consumers that are employed, and created a growing class of people who dont have incomes.

I dont need to tell you what happens when that class grows too large.
 
Endymio said:
It's closer to 40%, actually. And you have things backwards. If blindly employing superfluous workers with no thought to need or efficiency was an ethical economic model, nations like Cuba and the former Soviet Republics would be consumer paradises, rather than hell-holes from which people flee whenever given the opportunity.
Click to expand...
I blocked you in chat a while ago as you just argue with everybody all day and are a world leading expert on everything (aka nothing). You have such a jaundiced and jaded view of everything and everybody it's just depressing as f**k. Why have you popped back up, need to go back into my settings and turn you off...
 
Theinsanegamer said:
But if the jobs are all automated, theres nowhere for those people to go. Now you have created negative pressure on wages, reducing the buying power of the consumers that are employed, and created a growing class of people who dont have incomes.

I dont need to tell you what happens when that class grows too large.
Click to expand...
But all the jobs won't be automated.

1. AI can't do all jobs. Even AI + robot tech a decade from now can't do all jobs.

2. Humans create new job categories. When farming tech put people out of farming thousands of new "city" jobs sprang up.

3. Even in an unrealistic doomsday scenario that ignores 1 & 2, people can just opt out of the AI economy. The Quakers have been doing it for over 300 years. The no-AI version would be easier a) than their lifestyle (retro 2019 lives on) and b) be most people in this scenario. If everyone stops using their products these companies go out of business.

Incidentally, that's why the AI evangelists all talk about handing out income to the masses (Universal Basic Income), because if AI actually did what they promised (it won't) it would eliminate employees AND customers. Which isn't a great a sales pitch. So they hand wave that customer money will come from somewhere and it will all be fine so don't think about it and buy our product.
 
No more Tiktok office Siren and child day care videos? I'm so sad that those who can't figure out what a woman is and their gender studies degrees are being dumped hard.
 
yRaz said:
Most of these AI profits are paid for with money that doesn't exist and companies are trying to cull the herd before the crash.

The over hired to limit their competition's access to talent, creating artificial demand in the job market, leaning tons of people hanging with student loan debt and now they're blaming AI for why they are laying everyone off. There are CEOs that are flat out saying the AI layoffs are a lie and now you have banks saying they are limiting AI companies access to capital.

We have to start aiming the money printers away from the money furnaces. It would be one thing if the AI companies were saying "we need this much hardware for this much product to work and this with how we will monetize it" but we don't have a business model from these companies yet.

The only current functional business model is making survallence tech and weapon systems for the government and that's funded with money printers, too.
Click to expand...
The crash is coming and it's going to hit hard.
ScottSoapbox said:
But all the jobs won't be automated.

1. AI can't do all jobs. Even AI + robot tech a decade from now can't do all jobs.

2. Humans create new job categories. When farming tech put people out of farming thousands of new "city" jobs sprang up.

3. Even in an unrealistic doomsday scenario that ignores 1 & 2, people can just opt out of the AI economy. The Quakers have been doing it for over 300 years. The no-AI version would be easier a) than their lifestyle (retro 2019 lives on) and b) be most people in this scenario. If everyone stops using their products these companies go out of business.

Incidentally, that's why the AI evangelists all talk about handing out income to the masses (Universal Basic Income), because if AI actually did what they promised (it won't) it would eliminate employees AND customers. Which isn't a great a sales pitch. So they hand wave that customer money will come from somewhere and it will all be fine so don't think about it and buy our product.
Click to expand...
AI is a lie. If it were true then that Nadella fool wouldn't replace the workforce he's firing using AI as an excuse with cheap Indian labour.
 
Liranan said:
The crash is coming and it's going to hit hard.

AI is a lie. If it were true then that Nadella fool wouldn't replace the workforce he's firing using AI as an excuse with cheap Indian labour.
Click to expand...
I have never seen such a unanimously hated product in my life and it seems like the only people who like AInare investors/business people trying increase their profit margin by eliminating jobs
 
yRaz said:
I have never seen such a unanimously hated product in my life
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Only in the echo-chamber bubble of tech-oriented web forums. Enter any research facility in the country, and you'll see AI being used. Hospitals are using it for diagnostics, mining and drilling firms to guide exploration, pharmaceuticals to screen new drug candidates, militaries to plan operations. NFL teams are using it now to analyze footage and prepare for games, and walk into any classroom in the country and you'll see a teacher using AI to create course materials ...and all the students using AI to cheat on their coursework.
 
Endymio said:
Only in the echo-chamber bubble of tech-oriented web forums. Enter any research facility in the country, and you'll see AI being used. Hospitals are using it for diagnostics, mining and drilling firms to guide exploration, pharmaceuticals to screen new drug candidates, militaries to plan operations. NFL teams are using it now to analyze footage and prepare for games, and walk into any classroom in the country and you'll see a teacher using AI to create course materials ...and all the students using AI to cheat on their coursework.
Click to expand...
Used in so many fields and the only thing it has achieved is enable students to cheat and allow teachers to create awfully wrong PPT's.
 
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