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.

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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.