Jack Dorsey cuts 4,000 jobs at Block, citing AI tools that 'can do more and do it better'

Block lays off 40% of workforce as it goes all-in on AI tools

Block, the fintech group headed by Twitter cofounder Jack Dorsey, will cut its workforce by "nearly half" in one of the clearest signs of the sweeping changes AI tools are having on employment. Shares in the payment company soared more than 25 percent in after-hours trading on Thursday as it announced it would shed more than 4,000 jobs from its 10,000-strong workforce. "Intelligence tools have changed what it means to build and run a company. We're already seeing it internally," Dorsey wrote in a letter to shareholders. "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." Dorsey, who left his role as CEO of Twitter in 2021, is among the first Silicon Valley chiefs to explicitly tie huge job cuts to the ability of AI to replace human workers. Amazon has sought to play down the link to AI after announcing lay-offs totaling 30,000 roles since October, months after CEO Andy Jassy warned the technology would mean "fewer people doing some of the jobs that are being done today" in the coming years, especially in white-collar roles. Dorsey said he did not think he was early to the realization about the effect that AI could have on work, but that "most companies are late." He said he expected a "majority of companies" would reach the same conclusion within the next year and make similar structural changes. The staff reduction at Block comes as anxiety rises about AI leading to job losses across vast parts of the economy. Investors and economists are grappling with an influx of US economic data and corporate announcements in an effort to gauge the impact the technology could be having on the labor market. The latest non-farm payrolls figures were better than expected, suggesting the domestic jobs market was stabilizing, but several big US companies have committed to cutting staff. Amazon, UPS, Dow, Nike, Home Depot, and others in late January announced they would be cutting a combined 52,000 jobs. Dorsey said the cuts at Block, which owns the payment processor Square, came despite what he described as a "strong" financial performance in 2025. Block has made a contrarian bet on bitcoin at a time when many payment companies favored stablecoins: cash-like digital tokens that became regulated in the US last year. Block's strategy was spearheaded by Dorsey, a "bitcoin maximalist" who has said he believes the digital currency will eventually eclipse the dollar. The company offers payment services in bitcoin for merchants and consumers -- and suffered a loss on its own bitcoin holdings as the price of the cryptocurrency dropped 23 percent this year. In contrast, payment companies that made a bet on stablecoins experienced a boost. Stripe earlier this week said its stablecoin transaction volumes increased fourfold last year. In its fiscal fourth quarter, Block reported revenue of almost $6.3 billion, in line with Wall Street expectations. Its earnings tumbled to 19 cents a share, owing to a $234 million hit on its bitcoin holdings.

Jack Dorsey's Block cuts nearly half of its staff in AI gamble

Jack Dorsey's Block, the financial tech company that runs Square and the Cash app, is cutting its workforce by "nearly half" and axing more than 4,000 jobs. The company will shrink from more than 10,000 people to less than 6,000, Dorsey says in a post on X. And the reason why? AI. "We're not making this decision because we're in trouble," Dorsey says. "Our business is strong. Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. But something has changed. 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."

Wall Street Sees AI's 'Creative Destruction' Coming For Entire Companies

There's intense debate over how much of the acceleration in productivity is due to AI, but even analysts who reckon the new technology isn't yet making a big contribution mostly expect it will do so before long, with potential disruptions to industries such as back-office services and content production. A new worry is rippling across the stock market lately: entire businesses, not just their employees, may be thrown out of work. While most economists say fears of an AI job apocalypse are overblown, seismic shifts have happened in the past after big tech breakthroughs. The IT revolution of the 1990s led to a surge in productivity that sped up the US economy for several years. It also rendered companies or even industries largely redundant -- from travel agents and stockbrokers to classified advertising and newspapers, or video rental stores. Economists expect artificial intelligence will deliver higher productivity, which is key to raising growth rates in the long run. But investors are growing nervous about what damage might be done on the way, in capital markets as well as labor markets - especially because AI threatens disruptions on a broader scale than the internet boom. "Is this time bigger? Yes," says Anton Korinek, an AI expert at the University of Virginia - perhaps by a factor of 10. "The key difference from the 1990s is that the internet only disrupted information distribution," says Korinek. "AI disrupts cognitive production at large. That's a much bigger economic surface area." Ultimate Promise To be sure, all of this is early-days speculation over a fast-changing and largely untested technology, whose ultimate promise is to make workers more productive. Productivity is essentially a measure of how much output workers can deliver with the available tools, so it tends to surge upward when someone invents important new ones like the internet or AI. Data for the last three months of 2025 is due out later Thursday. Economists typically don't read too much into one quarter, since the numbers tend to jump around. Still, the trend has been ticking up. After big swings in the pandemic period, productivity has grown at an average pace of 2.6% since the start of 2023. That's more than double the average for the decade through 2019. There's intense debate over how much of this acceleration is due to AI. But even analysts who reckon the new technology isn't yet making a big contribution mostly expect it will do so before long. A more productive workforce drives the kind of efficiency gains that can allow both corporations and their employees to boost earnings, without triggering inflation. Historically, economies adapt to big tech breakthroughs - creating new industries and professions that nobody could've envisioned before - and living standards rise. 'How It Has to Be' That's the long-run view - which smooths out lots of bumps on the road. "Having some boom-bust in a sector is normal," says Simon Johnson, the Nobel prizewinning economist at MIT. "Maybe even how it has to be." But as companies go under, he says, it can create wider risks - especially if the failed businesses borrowed lots of money. "What you don't want is to infect the credit, and you definitely don't want to get inside the banking system." As of now, on US capital markets, what's become known as the "AI scare trade" is barely a blip. The S&P 500 is up by about two-thirds since the release of ChatGPT in November 2022. A big chunk of those gains has been driven by the surging value of AI companies themselves and their suppliers - giants like Meta Platforms Inc. and Nvidia Corp. - which creates one set of risks if their technology disappoints. But there's another set -- the one behind recent market wobbles -- which is different. It stems from the possibility that AI does deliver the promised productivity leap, and then some. That idea, captured in a research note by the little-known firm Citrini, sent the S&P into a brief nosedive at the start of last week. Citrini's scenario of massive white-collar layoffs driven by AI was basically sci-fi, set in 2028. There's no sign of anything like that now, with US unemployment at historically low levels. Still, Daniel Keum at Columbia Business School, who's studied how automation technologies like AI change the balance within firms, sees signs of a shift. His research, based on comments in earnings calls and annual reports, found that bosses become more likely to refer to their employees as costs, among other evidence of a tilt in power away from workers. Also, even if companies aren't yet cutting jobs or wages, they are trimming in areas like health care, remote work and even free snacks, Keum says. "These side benefits is what the companies go after first, before they go after reducing your paycheck." 'Essence of Capitalism' When businesses can cut payroll costs because technology enables them to do more with less, that's often good news for their profits and shareholders. Take Block, the fintech firm run by Twitter founder Jack Dorsey, which said on Feb. 26 it's slashing almost half its staff in a bet on AI productivity. The shares are up more than 15% since then. But last week also offered an example of how productivity gains can have a downside for investors - involving the storied International Business Machines Corp. The startup Anthropic said its AI tool can do something that once needed "armies of consultants": modernize Cobol, a dated programming language run on IBM computers. IBM shares plunged the most in a quarter-century, before recouping most of the losses. Past technology booms have seen household-name businesses fall by the wayside - like camera-maker Kodak and video-rental chain Blockbuster, left behind by the internet. It's all part of what the economist Joseph Schumpeter called the "creative destruction" which leads to progress. Federal Reserve Bank of Richmond President Tom Barkin referenced that phrase last week when asked if the Fed should be trying to counter AI disruption to businesses and the labor market. "That's been happening for hundreds of years in this country," he said. "It's part of the essence of capitalismBloomberg Terminal." That's not necessarily reassuring for industries -- and their investors and employees -- confronting the short-term risk. Korinek at UVA lists some of them, including back-office services, content production, customer support, legal and financial analysis, and coding. "Eventually, the disruption will extend to any firm whose competitive advantage lies in human expertise that AI can replicate," he says. "The transition period may involve stranded assets, debt overhang and the potential for sharp market corrections."

Block ditches 4,000 staff, because AI can do their jobs

One massive round of firings is apparently better for morale than a drip-drip-drip of death Twitter co-founder Jack Dorsey's financial services company Block has announced it will fire 40 percent of staff - around 4,000 people - because new "intelligence tools" the company is implementing "can do more and do it better." The company announced the sackings in the shareholder letter [PDF] accompanying its Q4 earnings announcement on Thursday. The payments and crypto company reported quarterly revenue of about $6.25 billion - up 3.6 percent year-over-year - and gross profit of around $2.9 billion. The company made $1 billion of gross profit in December 2025 alone. Full-year revenue came in at about $24.2 billion, and gross profit was around $10.36 billion. I believe the majority of companies will reach the same conclusion and make similar changes "2025 was a strong year for us," Dorsey wrote in the shareholder letter, before posing the question, "Why are we changing how we operate going forward?" His answer, spread across the letter and a Xeet, is that AI has already changed the way Block works, so it needs to change its structure. "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 wrote on X. In the shareholder letter, he wrote, "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 we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week." On X, Dorsey said he could have cut jobs "gradually over months or years as this shift plays out, or be honest about where we are and act on it now." He decided to let 4,000 people go all at once because "repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead." "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, adding his view that "A smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures." Whether Dorsey is blaming AI or not, Block has not served its shareholders well under his leadership over the last five years, with its stock down around 80% from its 2021 peak. But investors liked what they heard on Thursday, as Block's share price jumped about 23 percent in after-hours trading. "To those staying ... I made this decision, and I'll own it," Dorsey wrote on X. "What I'm asking of you is to build with me. We're going to build this company with intelligence at the core of everything we do." He added that Block's actions and new direction will help its customers to navigate change by creating "a future where they can build their own features directly, composed of our capabilities and served through our interfaces." "That's what I'm focused on now," he wrote. "Expect a note from me tomorrow." Before then, Dorsey will host "a live video session to thank everyone," including the approximately 4,000 people losing their livelihoods in a sluggish economy. "I know doing it this way might feel awkward," he wrote. "I'd rather it feel awkward and human than efficient and cold." Because firing 4,000 people so machines can take their jobs would never come across as cold. Dorsey thinks Block won't be the last company to change its operations to meet the AI moment. "I don't think we're early to this realization," he wrote. "I think most companies are late." "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively." ®

Dorsey's blunt AI warning sharpens debate over jobs and profits

Feb 27 (Reuters) - Jack Dorsey is not the first chief executive to say artificial intelligence will transform work. He may be among the first to act as if it already has - and to say so openly. "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," Block (XYZ.N), opens new tab CEO and co-founder said in a statement on Thursday. "I don't think we're early to this realization. I think most companies are late," he added as he laid out plans to cut over 4,000 jobs, nearly half the company's workforce, as part of an overhaul to embed AI across the fintech's operations. Block shares rose sharply on Friday, underscoring how markets are increasingly rewarding companies that present AI not as an experiment but as a driver of structural change. Dorsey also delivered a blunt warning to peers: most companies are behind the AI curve and will reach the same conclusion within a year. "I'd rather get there honestly and on our own terms than be forced into it reactively." Until now, most executives have resisted those kinds of sweeping conclusions even as their firms pour billions into the technology. The comments are likely to sharpen a growing debate among executives, economists, investors and policymakers: is AI primarily a tool that helps workers do more - or one that enables companies to do the same with far fewer people? AI JOB CUTS ACCELERATE AI-linked layoffs have been rising worldwide. According to a Reuters tally, companies have announced more than 61,000 job cuts tied to AI, including Amazon (AMZN.O), opens new tab, Pinterest (PINS.N), opens new tab and Australia's Wisetech (WTC.AX), opens new tab since November. But Block is among the highest-profile companies to cite AI explicitly as the primary driver of its reductions, rather than a secondary efficiency gain. Some investors argue that automation-related cuts are partly correcting for years of overhiring. "AI is the new scapegoat," said Brian Jacobsen, chief economic strategist at Annex Wealth Management, on Friday. Still, markets are increasingly uneasy about AI's potential to upend jobs and profits amid an uncertain global economic backdrop. A widely circulated report this week by Citrini Research outlined a 2028 scenario in which unemployment rises to 10.2%, driven by rapid displacement of workers in software, logistics and delivery roles. BUSINESSES HAVE BEEN MORE GUARDED Evidence is emerging that firms are beginning to see returns on their investment. Morgan Stanley analysts said this week there has been a steady rise in the number of companies reporting quantifiable benefits from AI adoption, based on an analysis of more than 10,000 earnings calls and fourth-quarter conference transcripts. Some 21% of S&P 500 companies mentioned at least one measurable benefit, up from 15% in the third quarter and 10% in the final quarter of 2024. Greater AI use will boost companies' profit margins by 40 basis points this year, they estimate. But until now, most executives and policymakers have been more guarded than Dorsey when talking about AI and jobs. "What we are seeing for the moment is that it's increasing productivity," ECB President Christine Lagarde told a committee of the European Parliament on Thursday. "But we are not yet seeing consequences in terms of labour market and waves of redundancies that are feared, and that you know we will be extremely attentive going forward." At the World Economic Forum last month, JPMorgan Chase (JPM.N), opens new tab CEO Jamie Dimon said jobs would disappear but new ones would emerge. On Friday, Bank of America global economists Claudio Irigoyen and Antonio Gabriel said AI could ultimately affect a quarter of all jobs. AI shock, they said, will be disruptive for companies that do not survive and for workers who are displaced, but the economy will be better off because it will create new jobs and business opportunities that were previously prohibitive. Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors, warned of unintended consequences from drastic steps like Block's. "Dorsey's strategy suggests that less is more and that human capital has lost its competitive edge," he said. "The question is whether the company is resetting to its smaller, nimbler startup days or whether it might lose the creativity and human intuition that built its most iconic products in the first place." Reporting by Utkarsh Shetti and Manya Saini in Bengaluru, Romolo Tosiani and Philippe Leroy Beaulieu in Gdansk and Francesco Canepa in Frankfurt; Writing by Josephine Mason Editing by Louise Heavens Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Manya Saini Thomson Reuters Manya reports on prominent publicly listed U.S. financial firms, including Wall Street's biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website. A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master's in journalism from the Symbiosis Institute of Media and Communication. Romolo Tosiani Thomson Reuters Romolo is a reporter based in Gdansk, Poland, where he focuses on covering Italian market, company news. Previously, he wrote for La Stampa, Agencia EFE and Il Sole 24 Ore. Graduated in History & Journalism between Pisa, Valencia, Parma, Seville and Turin.

Are Jack Dorsey's aggressive job cuts the start of an AI jobs apocalypse? Economists weigh in

Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021. Block CEO Jack Dorsey's move to cut nearly half the company's workforce is shining a spotlight on a growing question for corporate America: whether advances in artificial intelligence will ultimately mean fewer workers. In an earnings call Thursday, Dorsey said Block will cut about 4,000 jobs. Dorsey framed the move as more than a cost-cutting exercise, instead describing a shift in how companies operate as artificial intelligence becomes more central to business decisions. He also suggested other companies will follow suit. "I don't think we're early to this realization. I think most companies are late," he said. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively." Economists, however, question whether such moves signal a broader shift in the labor market or simply reflect company-specific adjustments. "This is a function of lax judgment during a period of rapid expansion and the retrenchment that follows," said Joseph Brusuelas, chief economist at RSM. "It should be understood within the unique context of that firm, and it does not signal risk to the broader U.S. labor market." The layoffs come amid broader questions about the employment picture. Though job cuts have remained low and the unemployment rate is a relatively healthy 4.3%, openings have contracted sharply and hiring in 2025 largely flatlined, with average payroll growth of just 15,000. Still, the tech-related picture looks relatively healthy. The information sector, one proxy for the tech industry, saw its unemployment rate fall to 5% in January, down 0.7 percentage point from a year ago. Job openings have declined in the sector, but demand for some roles remains firm: Postings in software development are up 12% from a year ago, according to Indeed. Most economists remain sanguine on the labor market, even in the current "low-hire, low-fire" environment. Claudia Sahm, chief economist at New Century Advisors, said Friday on CNBC that while it is "healthy" to discuss AI's potential impact, it is important not to overinterpret individual company decisions. "I would not extrapolate from Block to the whole U.S. economy," Sahm said. "It's important to understand that these AI tools -- the direction you go with them really depends on the leadership. Automation, mass layoffs is not necessarily the only path forward." A widely-discussed speech earlier this week by Federal Reserve Governor Christopher Waller also underscored the challenges and opportunities AI presents. While discussing the Fed's internal use of the technology, Waller said AI is more likely to enhance productivity than eliminate jobs outright. "When ATMs were first introduced, they didn't eliminate bank tellers. Instead, they changed how banking worked," he said. "The real impact wasn't automation alone -- it was how institutions reorganized around technology. AI is similar. The biggest gains won't come from simply adding AI to existing processes. They'll come from rethinking workflows, roles and systems." But even if layoffs are not yet widespread -- and Dorsey's warnings are not necessarily a broad harbinger -- companies are beginning to rethink how they allocate resources. Tech jobs account for only about 5% to 7% of the total labor force, but AI technology itself is spreading far beyond the sector. "Some jobs are apt to be disrupted by AI" as companies reconsider the balance between labor and technology, said Laura Ullrich, director of economic research for North America at Indeed Hiring Lab. "Companies are really shifting their investments toward capital spending and away from labor," Ullrich added. "They're investing in AI with the hope that it can replace jobs."

Fintech company Block lays off 4,000 of its 10,000 staff, citing gains from AI

BANGKOK (AP) -- Shares in the financial technology company Block have soared more than 20% in after-hours trading after its CEO announced it was laying off more than 4,000 of its 10,000 some employees due to its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to Square and CashApp. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. Their assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months.

Block, the parent of Square and Cash App, is laying off over 4,000 people

Block is the latest business to announce layoffs, with the operator of payment platforms Square and Cash App opting to cut jobs in favor of using more AI tools. The financial tech company, helmed by Twitter founder Jack Dorsey, is slashing its current staff of 10,000 to "just under 6,000." CNBC highlighted a letter Block sent to shareholders announcing the decision to nearly halve its workforce. According to the message from Dorsey: "The core thesis is simple. 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 we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week." We learned last year that Block had developed an AI agent called "codename goose" for interacting with LLMs. Leadership is clearly putting high expectations on that project and any other in-house tools to fill the shoes of thousands. "intelligence will be at the core of how the entire company works. How we make decisions, how we build trust and manage risk, how we build products, and how we serve customers," the shareholder letter states. Block also reported its latest financial results today. It finished the 2025 financial year with operating income (profit after expenses) of $1.71 billion. This isn't the first time the fintech company has made deep cuts in its employee count. Layoffs numbering about 1,000 were rumored both in 2024 and 2025.

Opinion | I Worked for Block. Its A.I. Job Cuts Aren't What They Seem.

Mr. Zamost was the head of communications, policy and people at Square, now known as Block, from 2015 to 2020. The texts poured in. "WOW." "WILD." "Bloodbath." As the former head of communications, policy and people at Square, the company now known as Block, I knew what those messages meant without having seen the news. Block stunned the tech world last week when it announced it was dismissing over 4,000 employees in a radical A.I.-driven restructuring. A.I. is "enabling a new way of working which fundamentally changes what it means to build and run a company," declared Block's chief executive, Jack Dorsey, on Thursday. Later that day, workers sent thumbs-down emojis raining down their screens during the company's all-hands video meeting and scrambled to figure out who had survived. The question on minds everywhere: Is A.I. a terrifying new reality in which the work they do might no longer be viable? Or is Block's announcement just a convenient and flashy new cover for typical corporate downsizing? The truth is, nobody knows the answer -- not even Block itself. In a note to the staff, Jack, my old boss, acknowledged that some of the decisions about which roles were eliminated might turn out to be mistakes. That was not a small admission. One might think a company would want to move cautiously before laying off nearly half its work force. But that person doesn't understand Silicon Valley generally, Jack specifically and the immense pressure on established tech companies to prove their A.I. credentials. Silicon Valley is led by engineers. Jack, like many engineers-turned-leaders, sees the world largely through that lens. At a time when some A.I. coding tools have rapidly improved to become a real game-changer, it's not a big logical leap for an engineering-minded leader to conclude that A.I. will rip through the rest of our work as well. Jack, who also co-founded what was then called Twitter, has long placed big bets based on a read of early signals. These layoffs, like his early adoption of Bitcoin and his decision to close offices at the onset of Covid before everyone else, show a tendency to identify patterns, see enormous growth as an inevitability and go all in with conviction. A.I. may provide a new justification for layoffs, but the playbook is familiar. Silicon Valley executives have argued that tech companies are overstaffed because they expanded too much during the pandemic. Block itself had gone through rounds of layoffs in 2024, 2025 and again in February to fix the predictable fallout from earlier executive turf wars that led to teams being duplicated all over the organization. (This, in my view, is what led Block to triple its head count in four years.) Look closer at specific cuts -- like shrinking the policy team and eliminating diversity and inclusion roles, former colleagues told me -- and Block's latest reorganization reads like standard prioritization and cost management, not an A.I.-driven reinvention. It is impossible to ignore how the A.I. arms race has reshaped the tech industry. The largest A.I. companies this year will spend roughly equal to the gross domestic product of Sweden to support their efforts. Fear that the A.I. tsunami will destroy the traditional software field has led investors to pummel the valuations of long-established companies like Salesforce and Adobe. Like those businesses, Block is not an A.I. company. It is a financial services tech business, and it understandably wants to avoid "software dodo" extinction before it comes for its industry. In that respect, A.I. is both a story line and a survival strategy. It makes sense for companies to show Wall Street that they understand the assignment: adapt or die. It matters less whether a company knows how to deploy A.I. and more whether investors believe it is on track to do so. In that respect, it doesn't matter whether a company's stated rationale is sincere or not. Once it announces it is cutting jobs for A.I., the remaining workers have no choice but to buy into that vision. This is what's happening at Block. Several months ago, employees were told that the company was tracking everyone's use of A.I. tools. The implicit message was clear: Adoption was not optional. Layoffs later became the enforcement mechanism -- reduce a team from 10 to one, and that remaining person has no choice but to adopt A.I. tools to attempt to absorb the work of the nine others. This increases A.I. use, and suddenly the rationale creates conditions that make it self-reinforcing. Congrats, you're now an A.I.-first company. That future, however, is colliding with the reality of what A.I. can actually do. The size of these layoffs is shocking to the public because of the gulf between asserting that A.I. is ready to replace work and our often disappointing encounters with it: useless email summaries, antisemitic chatbots and A.I. overviews that can't get even basic facts right. (Google recently told me Michelle Pfeiffer received an Oscar nomination for "most desirable female.") It's hard to reconcile the two. How are thousands of people losing their jobs to this? Generative A.I. can get you 80 percent of the way to a company blog post with decent prompting. But a chatbot can't meet with the mayor, cast commercial actors or negotiate with the Securities and Exchange Commission. Not all the roles I've heard that Block is eliminating can be handled by A.I., yet executives are treating it as equally useful today to all disciplines. Betting big before seeing all the cards is classic Silicon Valley. It puts the company's employees in a race to make A.I. productive before the gutted teams buckle under the workload and performance deteriorates. The transition to an A.I.-first world may be inevitable, but the path is still being paved with the heavy lifting of the very people being phased out. Wall Street rewarded Block handsomely, sending the company's stock up 24 percent after the announcement. That incentivizes the rest of corporate America to follow Block's lead and announce traditional layoffs while playing the A.I. card. I'm sure it will. Source photographs by Mario Martinez and Siri Stafford/Getty Images. Aaron Zamost is a tech communications consultant and was the head of communications, policy and people at Square, now known as Block, from 2015 to 2020. The Times is committed to publishing a diversity of letters to the editor. We'd like to hear what you think about this or any of our articles. Here are some tips. And here's our email: [email protected]. Follow the New York Times Opinion section on Facebook, Instagram, TikTok, Bluesky, WhatsApp and Threads.

Jack Dorsey's Block cuts thousands of roles as it embraces AI

Twitter co-founder Jack Dorsey says his technology firm Block is laying off almost half its workforce because artificial intelligence (AI) "fundamentally changes what it means to build and run a company." "Intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working," he wrote in a note to staff. The layoffs will mean the headcount at the company - which owns Square, CashApp and Tidal - will fall to less than 6,000 from 10,000. Block has seen several rounds of layoffs since 2024 but this is the first time it has cited AI as the reason for redundancies and marks the latest in a series of major job cuts in the tech industry. At the end of January Amazon laid off 16,000 employees, having already cut 14,000 roles a few months earlier. In a subsequent call discussing financial results, Brian Olsavsky, Amazon's chief financial officer, said the company was looking at cost reductions elsewhere as it ramps up AI spending. Meta, Microsoft and Google have also laid off workers as their focus has shifted to huge investments in AI. Mark Zuckerberg, Meta's co-founder and chief executive, said he is expecting "2026 to be the year that AI dramatically changes the way we work." "We're starting to see projects that used to take big teams now be accomplished by a single, very talented person," Zuckerberg said. Most tech companies today are using AI tools that automatically write the computer code required to operate software or websites, like Claude Code from Anthropic or Codex from OpenAI. Such automation of what has for decades been work done by highly trained people has led to fears that AI will overturn the job market. But some analysts have suggested the immediate threat to jobs has been exaggerated by executives who want to appear ahead of the curve. According to Dorsey, only more change related to AI capabilities is on the way. "I don't think we're early to this realisation," he said Thursday. "I think most companies are late". Block's financial report showed strong demand for its products and services, pushing up profits at the end of last year. The firm also said it will incur up to $500m (£370m) in restructuring costs as it pivots to the new strategy. Its shares rose by more than 20% in extended trading after the announcement. Dorsey is a co-founder and former chief executive of Twitter, the online micro-messaging platform that was later bought by Elon Musk and renamed X.

Jack Dorsey Is Wrong: Pro-Worker AI Is Possible

The impact of AI on workers depends on how leaders deploy it, with the same AI tool able to support and empower workers or surveil and sanction them, and the government has a role in encouraging AI applications that broadly serve people. The fear that artificial intelligence will lead to mass layoffs is spreading. Jack Dorsey, the co-founder of the financial technology firm Block, laid off nearly half of its workforce last week. Citing AI's labor-saving capabilities, he predicted other companies would soon follow suit: "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes." As an economist, I disagree with Dorsey's prediction. Block is not representative of the tens of millions of US businesses, and the choice Dorsey made was not the only option. In conversations about AI, it's important to focus less on dystopian scenarios and more on ways to bring about an AI future that fosters shared prosperity. Widespread automation -- replacing human workers and devaluing human expertise, as Dorsey predicts -- is only one possible outcome of AI. Another path is "pro-worker AI," a phrase coined by a team of MIT economists, that enhances the value of existing human expertise and creates new tasks. Unlike AI automation, pro-worker AI that raises a worker's productivity can increase wages and expand employment into new areas. An existing example they give is a food delivery app in China that added a voice chatbot to support hearing-impaired delivery workers, significantly improving their performance. A speculative example is an AI assistant that allows aircraft maintenance workers to become spaceflight maintenance workers. It may be easier to imagine the jobs that AI will destroy than the ones it will create, but job creation is common with many technologies. In fact, about 60% of jobs in 2018 were in occupational specialties that did not exist in 1940. Whether AI is pro-worker is not principally about AI's technological capabilities. It's about how leaders in corporations, government agencies, schools or civic organizations deploy it. Essentially, the same AI tool could be used to support and empower workers, or to surveil and sanction them. As the authors note, it's the intention, not the technology, that drives the effects on workers. Speed is another dimension to consider. AI tools are developing rapidly, but we can still be deliberate in the implementation. Federal Reserve Governor Chris Waller recently spoke about the use of AI within the Fed system, including in its operations, such as payment processing. He argued that the Silicon Valley ethos of "move fast and break things," is not appropriate for the Fed, given its responsibilities and need to maintain public trust. "AI systems can amplify errors as quickly as they amplify efficiency," Waller noted, laying out how the Fed built an internal AI platform and coding tools with guardrails for use across the system. The Fed doesn't want to move so fast that errors occur, but it wants to move fast enough to benefit from the new technology. Speed is a choice. Finally, there is a role for the government in encouraging a scenario in which AI broadly serves people. Public funding could be directed toward pro-worker AI or AI to improve public services, including competitive prize-style funding as used by the Defense Advanced Research Projects Agency or private-public partnerships like Operation Warp Speed, which rapidly developed the Covid vaccine. The goal is not to stop AI but to encourage its empowering applications and provide examples of use cases beyond automation. Sign up for the Bloomberg Opinion bundle Sign up for the Bloomberg Opinion bundle Sign up for the Bloomberg Opinion bundle Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Bloomberg may send me offers and promotions. Plus Signed UpPlus Sign UpPlus Sign Up By submitting my information, I agree to the Privacy Policy and Terms of Service. The private market, on its own, may focus too much on AI automation for a variety of reasons, as the MIT researchers suggest. It could be because these are the first AI tools being developed, and there is pressure from shareholders on companies to quickly demonstrate cost-cutting. AI that disempowers workers could also be a way for managers to reduce workers' bargaining power and shift a firm's economic profits away from workers. Or the longstanding vision behind artificial general intelligence may be biased toward worker-replacing outcomes. In addition, the government will have a role in responding to the disruptions AI causes, but it should also play a role in shaping the technology in its early stages. Despite the many challenges that AI presents, it also holds considerable promise. AI has the potential to substantially boost productivity growth -- that is, increasing the size of the economic pie. And a growing pie is a much better backdrop for improving people's lives than a stagnant or shrinking one. But a more positive future cannot simply be willed into existence. The decisions we make today will shape the AI of tomorrow. Elsewhere in Bloomberg Opinion: Want more? Subscribe to our newsletter.

Jack Dorsey’s Block Cut Half Its Staff, and He Says Other Tech Firms Will Follow Soon

Block CEO Jack Dorsey announced Thursday that the company will make drastic cuts as “intelligence tools†create a new way to work. He also warned that other companies could make similar changes soon. Dorsey shared his note to employees in a post on X. He wrote that Block, the company behind Square and Cash App, is reducing its headcount to 6,000 from roughly 10,000. That leaves more than 4,000 workers being laid off or asked to enter consultation. Dorsey noted the move had nothing to do with the company’s financial health. In fact, he said gross profit and the customer base are growing. Instead, he argued that the company’s intelligence tools are making it possible to operate with “smaller and flatter teams.†Block is effectively betting AI can replace nearly half its workforce, even though survey after survey has shown that most executives say that significant productivity gains from their AI investments have yet to materialize. Dorsey added that he could have made the cuts gradually over months and years or “be honest about where we are and act on it now.†He said he chose the latter because repeated layoffs erode morale, focus, and trust. The cuts come as many tech companies have slashed their staff in recent years while making similar arguments that they need smaller, faster-moving workforces with less bureaucracy. Just this year, Pinterest, Vimeo, and Amazon have all announced cuts. Amazon alone laid off roughly 16,000 workers in January after cutting 14,000 last October. In a blog post at the time, Amazon Senior Vice President of People Experience and Technology Beth Galetti acknowledged the concerns repeated layoffs can raise, the same point Dorsey alluded to. “Some of you might ask if this is the beginning of a new rhythm â€" where we announce broad reductions every few months,†wrote Galetti. “That’s not our plan. But just as we always have, every team will continue to evaluate the ownership, speed, and capacity to invent for customers, and make adjustments as appropriate.†Dorsey predicts more companies will soon follow his more blunt approach. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,†Dorsey said in a letter to shareholders. “I’d rather get there honestly and on our own terms than be forced into it reactively.†In a separate X post, he later acknowledged that the company overhired after the pandemic, but downplayed its role in Thursday’s layoffs, arguing Block is more efficient now than it was pre-pandemic. Even so, if companies are still readjusting after jumping on the pandemic-era hiring spree, it remains an open question whether the industry will face a similar reversal from this era’s AI cuts. The cuts at Block come just a couple of weeks after OpenAI CEO Sam Altman warned of a coming wave of "AI washing" from companies that blame the emerging technology for layoffs that are entirely unrelated. Of course, CEOs are also suddenly acknowledging that public sentiment is turning hard against AI, with data center construction being a major political sticking point in an election year. So Altman has his own motivations for deflecting blame over job losses.

AI fears give tech CEOs convenient cover for cuts

NEW YORK, Feb 27 (Reuters Breakingviews) - How many workers does a world with Claude need? Block (XYZ.N), opens new tab CEO Jack Dorsey upped the urgency of the debate over whether productive chatbots will reduce employment on Thursday, when he announced, opens new tab that the payments company would fire nearly half its workers. Whether artificial intelligence really can do the work of thousands of humans, or just provides impetus to slim down a bloated organization, is unclear. Nonetheless, investors added more than $6 billion to the company's market value on Friday morning. Such gains will help prod other firms into finding AI savings, real or illusory. It's hard for bosses, and more difficult for outsiders, to judge the optimal number of workers for a tech firm. When times are good, there's the temptation to overhire, ensuring that there are enough engineers to satisfy growing demand and fix emerging problems. That comes at the obvious cost of profitability, but valuations rarely paid the price, while CEOs could reasonably fret about the dangers of underinvestment. Just look at Southwest Airlines, which learned this lesson in 2022 when a software meltdown led to over 10,000 flight cancellations. Dorsey claims that machine learning has reset this balance of concerns, and rapidly. He said that Block had seen a 40% increase in production code shipped per engineer since September, as well as fruits of an order-of-magnitude jump in the capability and intelligence in its in-house AI framework, Goose. Hence fewer employees will do more, and faster. Coding-adept chatbots really are remarkable. But Block also had a lot of fat to cut. The company's headcount exploded during the pandemic, more than tripling between the pre-Covid year of 2019 and the peak in 2023. Meanwhile, it engaged in questionable deals and breakneck expansion. It agreed to pay $29 billion in stock for buy-now-pay-later company Afterpay in 2021. Such businesses are worth far less today. Rival Klarna, for example, was valued at $46 billion that summer in a private funding round, and now trades at $5 billion. Block also bought music streaming service Tidal in a bizarre expansion, adding musician Jay-Z to the board. Then there was a big push into highly speculative cryptocurrencies, including making bitcoin wallets and a mining system. The stock has performed poorly over the past five years. Block was far from the only technology company to overextend, especially in the frothy period exiting the pandemic. Its stock gain from pivoting away from that era, AI-driven or not, is concrete. With software valuations plummeting and machine learning fears top of mind, the signal to bosses is to fire away. Follow Robert Cyran on Bluesky, opens new tab. Context News* Block said on February 26 that it will cut over 4,000 jobs, or nearly half of its workforce. Chief Executive Jack Dorsey said that intelligence tools allow a smaller team at the payments company to do more and do it better. * "I don't think we're early to this realization. I think most companies are late," he said. * Block's stock rose 18% on the morning of February 27. Editing by Jonathan Guilford; Production by Maya Nandhini * Suggested Topics: * Breakingviews Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on X @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors. Robert Cyran Thomson Reuters Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the startup of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University.

Opinion: Block's layoffs might just be the biggest story of a tumultuous week. Here's why

Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, U.S., on Friday, June 4, 2021. In a week where the News Gods have given us a cornucopia of stories, it's a fool's game to pick out the biggest one. Was it Trump's extraordinary State of The Union? The phenomenal Nvidia results that failed to answer questions over whether the enormous hyperscaler splurge will result in significant profits further down the line? The rising tensions between Iran and the U.S.? Let me play the fool for a moment, because I think the news from a medium-sized tech payments company might have longer term tremors and be a warning of societal upheaval far greater than other stories of the week. Block, a $33 billion company, surged in extended trading on Thursday after cofounder and CEO Jack Dorsey, best known for cofounding Twitter, told the market he is laying off nearly half his workforce. He wrote to shareholders than 4,000 of the 10,000 were "being asked to leave or entering into consultation" to leave. Again: That is nearly half his workforce! Block CFO Amrita Ahuja said the job cuts would position the company "for our next phase of long term growth." "We are choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work," Ahuja wrote. Job cuts happen all the time, but what Dorsey had to say should be a wake-up call for everyone. He said he expects other companies to similarly overhaul their workforces as they see more efficiency gains from "intelligence tools." Let that sink in: Dorsey expects other companies to similarly overhaul their workforces as they see more efficiency gains from "intelligence tools." "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he wrote. Do the math: 10,000 jobs to just under 6,000 replicated across industries across the nation, across the world. So a new, growth company, not an old economy business, has just said companies will cut huge swathes of their workforces as new intelligence tools become diffuse. I keep getting told on CNBC that AI will create new jobs to replace those being lost. I've been asking the same question for years now. "What are those jobs? Where are the mass of jobs for the millions whose roles are set to be made redundant?" And I hear the same old trope every time - "oh those jobs haven't been created yet."

Jack Dorsey's 4,000 Job Cuts at Block Arouse Suspicions of AI-Washing

The possibility that companies are using AI as a justification for layoffs has been referred to as "AI-washing", with some analysts suggesting that business factors such as a bloated workforce and financial performance are more influential in staffing decisions. When Block Inc. laid off nearly half its staff this week, co-founder Jack Dorsey offered a seemingly simple explanation: artificial intelligence was allowing the company to do more with fewer employees. The announcement, though, landed at the center of a complex debate over AI and the future of work: on one side, genuine fear that the technology will displace jobs at an unprecedented pace; on the other, deep cynicism that companies are exploiting that fear to dress up old-fashioned cost-cutting as technological futurism. The possibility that companies are spinning employees and investors and using AI as a shiny excuse for ugly layoffs has become widespread enough that it has a nickname: AI-washing. Block's recent history suggests that AI adoption is not the only factor influencing its staffing decisions. The company loaded up on workers during and after the pandemic, more than tripling its employee base between 2019 and 2022, and has been slower than peers to scale back. Its stock had fallen roughly 40% since the beginning of 2025, a trajectory that had nothing to do with AI and everything to do with a business that had grown unwieldy. "When I look at the overall employee number, this is more about the business being bloated for so long than it is about AI," said Zachary Gunn, a senior analyst at Financial Technology Partners, an investment bank focused on fintechs. While companies are eager to show investors they are embracing new technology, experts on workplace automation say that AI tools have not gotten to the point where they are causing significant cutbacks in the labor market. A note from Goldman Sachs published Friday argues that fears of an imminent AI jobs apocalypse are "excessive." The bank's economists estimate that sectors like tech that are impacted by AI are shaving just 5,000 to 10,000 jobs per month from overall payroll growth in the US. Goldman forecasts a 0.5 percentage point increase in the unemployment rate as adoption rises. European Central Bank President Christine Lagarde told lawmakers in Brussels this week that ECB economists are monitoring for signs that AI is causing job losses and are "not yet seeing" the "waves of redundancies that are feared." White-Collar Risks When Amazon announced sweeping layoffs last year, it went to pains to say that AI was not the explanation. Asked about the cuts on an October earnings call, Amazon CEO Andy Jassy told analysts that the decision was "not really financially driven and it's not even really AI-driven. Not right now, at least." Similar questions have come up over and over in the past year as a growing number of companies, including Salesforce Inc. and HP Inc., cite AI efficiencies as the reason for job cuts. The questions about Block were especially pointed because the company's announcement came just days after a viral Substack newsletter, from a small outfit called Citrini Research, sketched out a nightmare scenario of mass unemployment, sending stocks tumbling. That report caught fire in no small part because big AI companies have been pumping out new, more powerful models. One of the leading players, Anthropic, recently released a number of tools that take on the bread and butter of American corporate work, such as financial analysis and legal research. Large language models have proven to be particularly adept at coding, and software engineers have been among the loudest proponents of the idea that big changes are coming. "If you've spent time with tools like Claude Code or Codex, you can see how smaller teams really can ship more," said Gad Levanon, chief economist of The Burning Glass Institute, a labor market research nonprofit that studies AI's impact on jobs. "The risk to white-collar work over the next few years is real, and workers, managers and policymakers should be planning for that world now," he added. Messages like those may turn out to have been prudent, but they're also magnifying the anxiety many workers already have about a tough job market. US companies announced more than 108,000 job cuts in January, the most in the first month of the year since 2009, when the country was in an economic meltdown. A recent survey of global executives published in the Harvard Business Review found that while AI has been cited as the reason for some layoffs, those cuts are almost entirely anticipatory: executives expect big efficiency gains that have not yet been realized. 'Two Options' In the letter Dorsey sent to his employees, and shared on social media, he put less emphasis on jobs at Block that have already been replaced by AI and more focus on what he is expecting to happen in the future. "i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now," he wrote. "i chose the latter." Dramatic restructuring moves may indeed be necessary to capture the benefits of AI, said Kristina McElheran, an associate professor of management at the University of Toronto Scarborough. "Sometimes, if you really need to make a big change and you need everyone to understand a new direction -- your employees, your partners, your customers, the market -- you have to do something really big and irreversible, like burning the apocryphal boat," she said. Get the Management & Work newsletter. Get the Management & Work newsletter. Get the Management & Work newsletter. Analyzing trends in leadership, company culture and the art of career building. Analyzing trends in leadership, company culture and the art of career building. Analyzing trends in leadership, company culture and the art of career building. Bloomberg may send me offers and promotions. Plus Signed UpPlus Sign UpPlus Sign Up By submitting my information, I agree to the Privacy Policy and Terms of Service. For Dorsey, the situation also plays into older concerns about his interest in unproven technological bets and his reputation for struggling with financial discipline. At Block, he has come under fire for directing resources into Bitcoin-related projects, at the expense of the more proven parts of the business, like the Cash App and the Square retail payment technology. Twitter, the other company he co-founded, was famously gutted by Elon Musk, who quickly cut 80% of the staff when he bought the social-media network. Dorsey took to social media on Friday to respond to one critic who pointed to the accusations of bloat that have dogged his companies. Dorsey acknowledged that the company had "over-hired" during Covid, and operated inefficiently when it ran Square and Cash App as two separate businesses. But he said Block had corrected for all that, and that it now aims to generate more than $2 million in gross profit per employee, quadruple what it was generating pre-pandemic. "We are taking bold and decisive action here, but we're doing it from a position of strength," Block Chief Financial Officer Amrita Ahuja said in an interview with Bloomberg. The reaction so far on Wall Street is likely to drown out any doubters. Investors sent Block's shares up 15% on Friday in the wake of the layoff announcement. Disentangling how much of that stemmed from excitement over the company's adoption of AI and how much was due to relief at a smaller payroll may be beside the point in a market that often rewards job cuts.

'We see an opportunity to move faster with smaller, highly talented teams using AI to automate more work': Block decimates workforce in favor of AI

* Jack Dorsey says smaller teams and AI are more efficient than human-only teams * 4,000 workers risk losing their jobs, around 40% of the company's headcount * Dorsey sees AI boosting company speed and agility Block has set out plans to cut more than 4,000 jobs, marking a near-40% reduction from around 10,000 workers (per its most recent quarterly report) to under 6,000 employees. Company CEO and Twitter co-founder Jack Dorsey explained the drastic decision doesn't come as an alarmed response to financial struggles, but rather an acknowledgment that AI tools could significantly boost efficiency, reducing the number of workers it needs. And this much is clear - the company posted a healthy 24% year-over-year growth in gross profit. Jack Dorsey replaces 40% of workers with AI Dorsey also reportedly decided to make one big cut, rather than announce multiple rounds of layoffs, in a 'one and done' approach rather than continuous blows to worker morale. Though the 40% reduction certainly hasn't gone unnoticed. Block expects to incur around $450-500 million in costs associated with the restructuring, with severance packages including at least 20 weeks' pay, a $5,000 payment and more. As for the company restructuring itself, Block is going all-in on agentic AI. "A significantly smaller team, using the tools we're building, can do more and do it better," Dorsey wrote in a letter to workers and shareholders. Dorsey explained that "intelligence will be at the core of how the entire company works," from making decisions and managing risk to building products and serving customers. He also noted AI's impact on company speed in his letter, suggesting that slimmer teams and speedier AI systems could boost agility. Removing unnecessary layers of management will certainly help with that, and it's a move that's already been taken by the likes of Amazon, Google and Microsoft. Company shares rose as much as 26% in after-hours trading before dipping slightly, though they're still down considerably from early- and mid-2021 highs. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button! And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.

Square parent company Block cuts nearly half of workforce as AI takes jobs

Fintech company Block announced that 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," Jack 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." Block is the parent company for online payment platforms such as Square and Cash App. Investors so far appear encouraged by Dorsey's assertion that the cuts, and increased reliance on AI, will drive profitability, analysts said. Shares increased more than 20% in pre-market trading Friday. Block's layoffs speak to larger fears about job cuts driven by a growing use of AI. Goldman Sachs noted in February that the increasing pace of AI adoption could drive up unemployment this year, and estimated that the technology had already resulted in 5,000 to 10,000 monthly net job losses last year. A November study from the Massachusetts Institute of Technology found that AI could already replace nearly 12% of the workforce in the US. The tech sector is among the most hit, and workers at other tech companies are feeling the heat, too. Mark Benioff's Salesforce cut about 4,000 jobs last year, with the CEO saying that he "needs less heads" given AI's efficiency. Dorsey claimed on Thursday that the 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 bn in total revenue). Dorsey 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". He wrote: "Repeated rounds of cuts are destructive to morale, to focus and to the trust that customers and shareholders place in our ability to lead." Block executives 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. Earlier this month, employees still at the company reported that there was rapidly deteriorating employee morale and that there were requirements to use generative AI, according to WIRED. WIRED said it reviewed an employee complaint submitted to Dorsey in a recent all-hands meeting that said "morale is probably the worst I've felt in four years" and that "the overarching culture at Block is crumbling". Dorsey acknowledged the risk of the cuts on X, and in his message to shareholders. The company's most recent 10-K filing outlined ways its AI gamble could go wrong. "Our ability to successfully operate with a reduced workforce is expected to depend in part on the effectiveness, reliability and adoption of our proactive intelligence and AI tools," the company noted. "These technologies may not perform as expected, may require more time or expense to implement effectively, may introduce operational or cybersecurity risks or may fail to enhance productivity and maintain operational efficiency as expected." "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," Stephen Innes of SPI Asset Management told the Associated Press. He said: "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not."

Dorsey's radical workforce reset may embolden CEOs

Block's Jack Dorsey did just that Thursday, and Wall Street's standing ovation gives other CEOs permission, or even an incentive, to consider the same thing. What he's saying: Dorsey, an iconoclast who co-founded and once led Twitter, was blunt in announcing via X that Block will say goodbye to 40% of its 10,000-person workforce: * "Something has changed. 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," he wrote. * "I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter." Zoom in: The fintech's stock rallied as much as 25% on the news, after having been down more than 16% over the past year and 76% over the past five years. * Block's declining stock price put Dorsey under pressure to make changes, although he denied that the layoffs were related to Block's financial performance. The big picture: Wall Street was recently captivated by a viral doomsday report predicting AI would wipe out jobs, although stated reasons for most other AI-related layoffs so far have been much less explicit than what Dorsey did. * Many AI executives and investors insist that the tech will lead to temporary labor dislocations rather than net job loss, echoing the industrial revolution. The bottom line: It's one thing to replace people with machines. It's quite another to prove that it makes business sense.

Jack Dorsey's Block lays off nearly half of workforce due to AI

Jack Dorsey's Block, a fintech company that owns Square and Cash App, is laying off nearly half of its workforce. Dorsey announced the layoffs on X, citing AI as the main reason behind the move. "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. This Tweet is currently unavailable. It might be loading or has been removed. The layoffs come after a strong quarter for Block, with revenue, profit, and customer base all growing. But Dorsey appears to think that the rise of AI makes this move inevitable, presenting the decision as a choice between doing one sharp cut now, or laying people off slowly over a longer period of time. "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. Employees that are being laid off will get their salary for 20 weeks plus one week per year of tenure, six months of health care, and $5,000 in cash, among other benefits. But how hard will it be for them to find another job? Dorsey's reasoning echoes the sentiment recently shared by several tech leaders, with Anthropic's Boris Cherny claiming that "coding is largely solved" and Elon Musk saying that AI will "replace all jobs." A widely shared "thought exercise" by Citrini recently predicted an economic collapse by 2028 due to AI driving humans out of work. "Something has changed," wrote Dorsey. "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." The market reacted positively to the news, with Block's shares rising by nearly 30 percent in extended trading following the announcement.

Jack Dorsey's Block cuts 40% of staff, 4,000+ people -- and yes, it's because of AI efficiencies

Former Twitter co-founder Jack Dorsey's new company Block -- the parent of merchants payment system Square, mobile peer-to-peer payments Cash App, music streamer Tidal, and open source AI agentic system Goose -- is sending shockwaves across the business world tonight after announcing a more than 40% headcount, cutting its workforce by more than 4,000 people out of a prior total of 10,000, despite its latest quarterly earnings statement released today showing $2.87 billion in gross profit up 24% year-over-year. The culprit? Newfound AI efficiencies. As Dorsey put it in a note shared on his own former social network, X: "we're not making this decision because we're in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. 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. i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter. repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. 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. a smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures." The core of this reorganization is a pivot toward an "intelligence-native" model. Dorsey argues that a significantly smaller team, leveraging the very tools they are building, can deliver more value than a traditional large-scale organization. Block is re-engineering its entire operational stack to be orchestrated by AI, moving away from human-intensive management hierarchies toward what it calls "agentic AI infrastructure". This includes four primary focus areas: The financial strength cited in the lede is driven by deep engagement in Cash App and Square. Cash App's gross profit grew 33% YoY to $1.83 billion, while Square saw its strongest year on record for new volume added (NVA). Specific product highlights include: Block also exceeded the Rule of 40 -- the industry benchmark where the sum of gross profit growth and adjusted operating income margin exceeds 40% -- for the first time in the fourth quarter. Not everyone was convinced by Dorsey's letter stating that AI efficiencies were the primary driver of the layoffs. As Will Slaughter wrote on X: "In 3 years from December 2019 to December 2022, Block $XYZ more than tripled its headcount from 3,900 to 12,500. 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." Entrepreneur Marcelo P. Lima offered a similar sentiment on X, writing in part: "Everyone will assume Jack Dorsey 'greatest of all time' is doing this because of AI. He's not. Block has been massively bloated for years. Don't forget, Jack was head of Twitter. When Elon took over, he fired 80% of staff within 5 months and the product got better. This was before generative AI and Claude Code." And yet, regardless of how heavily AI factored into these layoffs in particular, the outcome on the wider enterprise landscape may ultimately be the same. With Block's stock price rising more than 24% on the news, the boards and leadership of other public companies will likely be forced to at least entertain the idea of similarly drastic cuts if they believe AI can replace human labor and drive greater organizational efficiencies. As user @khuppy wrote on X: "By Q2, if you aren't firing lots of employees, your board will fire you for being a dinosaur who doesn't implement AI. It's going to happen fast now. Feudalism, here we come..." Clearly, companies across sectors but especially those in tech and services will be re-examining their headcount in light of Block's latest move. Despite the robust financial performance, the human cost is stark. The reduction from over 10,000 to just under 6,000 employees is one of the most drastic in fintech history. Dorsey's internal note, while aimed at transparency, was met with a mix of awe at the technical vision and criticism of the timing. Affected employees are receiving a severance package that includes 20 weeks of salary plus one week per year of tenure, equity vesting through May, and a $5,000 transition fund. Dorsey noted that communication channels would stay open through Thursday evening so the team could say goodbye properly, stating, "i'd rather it feel awkward and human than efficient and cold." For enterprise decision-makers, Block's move represents a fundamental challenge to the "growth at all costs" hiring model that has defined the last decade of tech. Leadership teams should view this not merely as a cost-cutting measure, but as a strategic reset where organizational value is measured by the ratio of output to "intelligence-native" tools rather than total headcount. Executives should begin by auditing their own internal workflows to identify where agentic AI can consolidate roles and flatten management hierarchies before market pressures force a more reactive, less orderly contraction. Even if not leading to as drastic of cuts, hiring slowdowns and freezes, Block's move should likely prompt at least the kind of policy introduced separately by Shopify CEO Tobi Lutke nearly a year ago: "Before asking for more Headcount and resources, teams most demonstrate why they cannot get what they want done using AI." While the community reaction to Block's layoffs highlights the potential for brand damage and morale loss, the 24% surge in Block's stock price suggests that the public market is increasingly rewarding lean, automated efficiency over human-intensive scaling. Decision-makers should evaluate their current "bloat" against the benchmark set by Dorsey: if a company of 6,000 can drive $12.20 billion in gross profit, the standard for organizational efficiency has been permanently raised.

Block shares soar as Dorsey leans on AI to trim workforce

Feb 27 (Reuters) - Block (XYZ.N), opens new tab shares soared more than 20% in premarket trading on Friday after it announced it would nearly halve its workforce as part of an overhaul to embed artificial intelligence tools across its operations. The layoffs are the most visible signs of how the U.S. fintech industry is navigating the impact of AI, with its CEO, tech billionaire Jack Dorsey, warning that most companies were "late" to realize the emerging technology's potential. "At its core, it's about how some companies may be run going forward - not just doomsday headcount reductions, but also enabling higher ROI investments in growth and FCF," analysts at Evercore ISI wrote, referring to free cash flow. Accelerating AI adoption is helping companies to cut jobs in divisions most exposed to automation. Economists at Goldman Sachs have estimated that AI was responsible for job losses amounting to a 5,000 to 10,000 hit to average monthly job growth in the industries most exposed to it in 2025. Block was one of the companies that aggressively hired during the pandemic as the use of digital payments and online commerce spiked. "In Block's case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat," said Matt Britzman, an analyst at Hargreaves Lansdown. Its workforce jumped from about 3,800 employees in 2019 to more than 10,000 in 2025 as Block battled increasing pressures from rising competition in its payments and buy-now-pay-later segments. "While the RIF (reduction in force) is large, it does bring Block's headcount back toward pandemic-era levels, making it a standout in gross profit per employee, well ahead of its peers including Visa," JPMorgan analysts said. Reporting by Utkarsh Shetti and Manya Saini in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

'The ideal number of human employees inside of any company is zero': why AI gives company owners what they think they want | Fortune

Daniel Miessler has spent 25 years in technology -- advising Fortune 10 companies, building open-source security tools used by penetration testers worldwide, and leading cybersecurity operations at firms like Apple and Robinhood. But his most provocative argument isn't about malware or zero-day exploits. It's about something far more disruptive: the end of the job itself. "The ideal number of human employees inside of any company is zero," Miessler wrote in a recent essay and YouTube video. "Companies are extremely unhappy with their current workforces, and just now -- starting in 2023 and 2024 -- it is actually becoming possible to replace human intelligence tasks with technology." It's a blunt claim. But Miessler, who now runs a company called Unsupervised Learning that focuses on "upgrading humans" for an AI-driven world, argued that this isn't cynicism -- it's capitalism following its oldest instinct. In a statement to Fortune, Miessler doubled down, adding the rational is pure economics 101. "It is my belief that companies would rather be doing all the work themselves if they could, as opposed to paying humans to do it. Just the same way that they would rather have machines in a factory than have a bunch of humans doing those machine jobs." Not only can the work be done by a machine at a cheaper and achieve higher levels of consistency and reliability, Miessler told Fortune, but the same is true of AI, just swap out mechanics for intelligence. "This whole AI thing isn't really anything special in that frame. It's just the thing that allows us to continue what the Industrial Revolution started," Miessler said, adding he wasn't throwing the "zero" number around -- there's a specific reason why he truly believes no one will be working. "When I say zero, I mean zero workers. As in factory [or] machine jobs. Like regular working people," will be out of a job in the AI boon. There may be some "few rockstar generalist managers," Miessler said, but they too might soon become obsolete, working to manage their AI counterparts "until superintelligence, but that's not even worth commenting on because who knows what that world looks like." Miessler's arguments aligns with several viral doomsday essays that jumped the track from social media to stock markets and rattled investors in February: Matt Shumer's prediction of just 18 months left for knowledge work and Citrini Research's gloomy scenario of a 2028 rocked by white-collar recession. Miessler has been arguing this for some time, though: "Capital has always seen labor as a foul necessity," he wrote in December 2025. "The moment they could find any way to reduce or eliminate it, they would." Ben Shiller, associate professor of economics at Brandeis University, specializes in researching how technology reshapes markets, and he told Fortune that he agrees with this assessment. "To be honest, I am scared for the future." The scale Miessler describes is staggering. In The Great Transition, he estimated that knowledge workers globally receive roughly $50 trillion per year in compensation -- and argued that companies are now, for the first time, technically capable of not paying it. "That is how much money companies are spending to pay humans," he said. "And the major transition here is they don't want to be paying those humans. They actually never did." The shift is not incremental, he said, it's structural. Prior waves of automation replaced specific tasks. A factory robot could weld a car door, but until now, it couldn't write a legal brief, file a customer complaint, or draft a marketing strategy. AI is different because it replaces intelligence, not just labor, Miessler wrote -- and that changes everything. Shiller agreed that AI offers companies a good excuse to conduct layoffs, either as a reason or if they genuinely see AI as a good replacement, but he said he'd also argue that AI workers have a number of other advantages over human workers. For one, hiring and firing are both full of friction, but "you can scale up an arbitrary number of workers almost instantly with AI. It doesn't matter if it's 3 p.m. in the afternoon or midnight. You have an idea, you want someone to respond immediately, you can use it. There's a lot of reasons why AI workers are actually advantageous over human workers." Furthermore, Shiller said, it's just "so much cheaper" to use AI workers than human workers. Even if the work is a little bit worse than human work product, "it's so much cheaper that it doesn't matter." Alex Imas, professor of Behavioral Science, Economics and Applied AI at the University of Chicago Booth School of Business, also agreed, with an important clarification. It's "trivially true" that businesses ideally wouldn't need any human workers, he told Fortune, "but from the perspective of, like, if you did that tomorrow, you would end up in a very bad place for many, many different reasons." If nobody is working, then nobody is buying products, Imas pointed out, and he traced the issue to a larger issue. "The people in the tech world like to think about supply and nobody talks about demand." So if you make a lot of stuff at zero cost, then "everybody has everything," but also nobody has money to buy the things that are being made. He chalked this up to tech executives' incentives and education: "I don't think they've taken many econ classes," he said, arguing that tech executives are judged by what tools and software they're releasing, a supply story only, whereas economics trains you in "equilibrium thinking." In Miessler's vision of a fully AI-managed company, human employees aren't the ones executing work -- they're the ones holding AI accountable for it. "Humans are still there," he explained, "but they're the ones responsible for improving the AI." He called this "the new model for business" -- and warned that companies still running on pre-2023 org structures are in existential danger. His timeline is specific: 2026 brings accelerating layoffs and startup disruption; 2027 is when "it really starts to hit hard"; and by 2028, he wrote, "most companies with a pre-2023 structure and workforce are now considered in danger of going out of business." The winners in this transition, Miessler argued, will be what he calls "high-IQ, high-agency generalists" -- people who can direct and manage armies of AI agents rather than compete with them. The losers will be anyone whose value was tied to executing routine cognitive work: the writers, analysts, coders, and coordinators whose roles are already showing measurable decline. McKinsey research from 2025 supports the general direction of Miessler's argument: 75% of knowledge workers already use AI tools, and 30% of current hours worked could be automated by 2030. Miessler isn't calling for panic -- but he is calling for urgency. "This is colossal," he wrote. "This is economy changing. This really is the end of labor." For a man whose career has been about securing systems against outside threats, the biggest vulnerability he sees now isn't a hacker. It's a hiring manager who still thinks the org chart is safe.

The AI Jobs Apocalypse Is Starting to Feel Real

Can't-miss innovations from the bleeding edge of science and tech It's difficult to say how many jobs have been lost to AI, or will be lost in the future. But in tech and financial circles, anxieties over an AI jobs apocalypse are running higher than ever. The other week, it was a viral paper from Citrini Research imagining a dire near future in which vast portions of the workforce are outmoded by AI that had Wall Street quivering in its boots. Weeks before that, Anthropic's new Claude Cowork AI agent sparked a mass stock selloff over fears that it could automate tasks like legal work, wiping out billions of dollars. Tech leaders have warned of AI's potential to disrupt the job market for years, but it's only in recent months that the atmosphere has felt so high-strung. Additional fuel was thrown onto the fire when, last week, Block CEO Jack Dorsey announced that his fintech firm, formerly known as Square, was firing 4,000 employees, or nearly half its workforce. Though Dorsey attributed the layoffs to pandemic overhiring, he also enthused that "intelligence tools" were creating a "new way of working" with smaller teams. This sounded alarm bells across the industry, per a roundup of reactions by The Wall Street Journal. "Square is just the beginning," former Meta and Salesforce executive Clara Shih wrote on X, responding to a lengthy post claiming that the Block layoffs are "the first AI cut." "A lot of the jobs that we've thrown human beings at the last 20 or 30 years, you won't need as many human beings doing those same jobs," Amazon CEO Andy Jassy said in a CNBC interview when asked about Dorsey's cuts flagged by the WSJ. The fears are warranted, but likely overstated at the present moment. There's no denying that firms are laying off droves of employees, and there's also no denying that many of them are openly enthusiastic about AI. One report found that AI was cited in the announcements of more than 54,000 layoffs last year. Those employers include Amazon, which is in the midst of culling 14,000 employees after boasting of the "efficiency gains" from deploying AI across the company. But are autonomous systems actually replacing those jobs? Experts caution that executives may simply be using AI as an excuse to justify cuts that were driven by purely financial logic, a phenomenon that's being dubbed "AI-washing." Marcelo P. Lima, founder and managing partner at Heller House, disputed alarmists claims that Dorsey's cuts at Block were AI driven, calling them the "new Citrini fake narrative." "Everyone will assume Jack Dorsey... is doing this because of AI," he wrote on X. "He's not." The reality, Lima explained, was that the company was bloated in the first place. Like many tech companies during the pandemic, it had hired thousands of new employees, ballooning its workforce from 3,900 in 2019 to 12,500 in 2022. There's also little evidence that AI systems are currently capable of taking over human roles in any robust sense. Numerous studies have found that even the most capable AI agents fail at common white collar tasks, while providing little economic benefit: a widely cited MIT study found that 95 percent of companies that integrated AI saw no meaningful increase in revenue. An additional body of research has illustrated how AI can negatively impact human employees, dragging down efficiency and even intensifying work. Still, the fear of something is often more damaging than the thing itself, and if the market is constantly rattled by AI's still vague potential to disrupt if not upend the job market, it could cause economic uncertainty to fester for years to come.

AI is already killing white-collar jobs and wages

On a Saturday in February, one of Substack's most widely read financial newsletters published a thought experiment: What if the AI boom, which has already minted extraordinary wealth and spurred corporate capital expenditure to historic highs, actually turns out to be a bearish signal instead of a bullish bubble waiting to burst? What if the same technology making white-collar workers more productive will soon destroy the larger white-collar economy? The widely read Substack post by Citrini Research began with a hypothetical future memo dated June 30, 2028: "The unemployment rate printed 10.2% this morning, a 0.3% upside surprise. The market sold off 2% on the number, bringing the cumulative drawdown in the S&P to 38% from its October 2026 highs." In the real world present, Citrini's thought experiment rocked the market. The Dow fell 1.7% that Monday. Individual stocks mentioned in the post -- Monday.com, DoorDash -- fell about 7% each. IBM fell almost 13%. In other words, a Substack post laying out a theoretical scenario caused a real-world multibillion-dollar wipeout. And that may be an even more revealing read on the economy than the Citrini Research post that kicked it off. Would an implausible or far-fetched scenario have created that kind of reaction? Or did the post touch on very real, widespread, yet quiet fears -- and lay bare how little choice any of us may have about the AI future? White-collar payrolls have now contracted for 29 consecutive months. According to Aaron Terrazas, a former chief economist at Glassdoor, that's without precedent. "It's clear that white-collar hiring has slowed and white-collar payrolls have contracted. This is incredibly unusual, going back 70, 80 years," Terrazas said in an interview. "The fact is, we have not seen this long of a contraction in white-collar jobs outside of a recession ever before. That has to be kind of ringing some alarm bells." But the headline unemployment rate -- still hovering around 4.3% -- obscures this narrower white-collar issue. Terrazas argued that the number has become a less reliable signal than it once was, as labor market slack increasingly appears as underemployment and workforce exits rather than formal unemployment. The more telling indicators, he said, are job postings and hiring rates, both of which have been depressed for some time. "We're kind of getting smoke signals in all of these different corners of the economy right now," he said. Daniel Keum, a professor at Columbia Business School who studies AI in the workplace, is less circumspect. He said that AI is causing demand for white-collar workers to fall -- no bones about it. He described the current moment as a "technological shock" with two distinct parts. The first is already here: AI is replacing white-collar labor, not augmenting it, at least in the U.S. "U.S. labor costs are very expensive," Keum said in an interview. "So AI is targeted squarely at replacing people and reducing headcounts. That pays off handsomely." The second part is AI creating a positive shock on the revenue side as it helps companies generate new products, services, and therefore new jobs. That dynamic is coming, Keum said,, but it could still be years away. Right now, we're absorbing the negative cost shock without yet seeing the positive revenue shock. Not all the displacement looks like a human being swapped out for an AI agent, Keum said. Some workers are losing jobs not because their specific roles have been automated, but because companies are reallocating resources toward AI and away from everything else. Meanwhile, those eye-popping corporate capital expenditure numbers -- the hundreds of billions Amazon $AMZN, Microsoft $MSFT, Google $GOOGL, and Meta $META are pouring into AI infrastructure -- are not translating into hiring, because they're going into data centers, not people. Essentially, dramatic rises in business spending don't equal demand for more workers with degrees, Keum argued. In fact, it may indicate the opposite. As an indicator of demand for white-collar labor, Keum suggested looking to new MBA graduates. As arguably the most credentialed, most in-demand workers in the knowledge economy, their outcomes function as a leading indicator of elite labor demand. If companies are pulling back on even their most desirable hires, something has shifted. And that data is not encouraging. In January, The Wall Street Journal reported that, at Duke $DUK University's Fuqua School of Business, 21% of job-seeking graduates were still looking for work three months after graduation last year -- up from 5% in 2019. At Georgetown's McDonough School, that figure was 25% last year, up from 8% in 2019. At Michigan's Ross School, it was 15%, up from 4%. Even Harvard Business School still had 16% of graduates unemployed after three months, higher than before the pandemic. To be clear, AI is unlikely to be the only force at work. Immigration policy shifts under President Donald Trump have complicated the pipeline for foreign graduates who once expected to secure U.S. work visas. Major tech firms are still digesting, and in some cases unwinding, the hiring sprees they went on after the pandemic. And elevated interest rates may have functioned to temper corporate exuberance. Volatile and even chaotic trade policy has rattled confidence from glass-walled c-suites to humble corner stores. But even accounting for those factors, weakening demand for the most credentialed segments of the labor market stands out. If even the most elite business schools are sending a growing share of graduates into prolonged job searches, something fundamental has shifted. It's simple: When some form of automation could substitute for your labor, your ability to negotiate is seriously weakened. "A junior associate at a law firm before could demand 20% of billable hours," Keum said. "Now you bill more, but you take 10% -- because if you demand anything more, there's AI." If AI weakens labor's ability to capture greater value, that could accelerate a longer-term trend. In the U.S., labor's share of GDP -- a proxy for how much value workers capture vs. how much capital captures -- has been slowly declining for decades, falling almosty 10 percentage points from its peak in the late 1960s and early 1970s to 56% in 2024. Still, it can be difficult to pin down whether white-collar compensation in particular is falling, in part because more granular data is hard to come by, and also because salaries can be sticky even as overall compensation may fall. From one year to the next, companies tend not to lower salaries directly because workers resist that; no one loves to see their paychecks actively shrink. However, companies can change the bargain in other ways that don't necessarily announce themselves. Terrazas, the former Glassdoor economist, described three buckets of other possible pay cuts. First, benefits packages may quietly shrink. For example, an employer may cover less of a health insurance premium than it once did. Second, non-salary compensation may become less generous, whether in the form of reduced stock grants or bonuses getting cut. Finally, the job itself may expand -- duties increasing, hours lengthening -- without any corresponding increase in pay. The last is "kind of like shrinkflation," Terrazas said, borrowing the consumer-pricing term for when a bag of chips gets smaller without the price changing. All these factors potentially undercut compensation, even if salary numbers don't change. And here again, there are signs that compensation is being cut in these ways: According to recent benefits data from Sequoia, the share of companies offering health plans that fully cover employee-only premiums has fallen for three straight years. While moving from zero-cost coverage to standard market-level cost sharing may not register in headline wage data, it reduces take-home compensation all the same. Still, asked about this dark vision, Terrazas was clear: "To date, the evidence suggests modest rather than tectonic shifts, and there's not yet a smoking gun that directly implicates AI -- only a lot of smoke. Data is unavoidably backward-looking, so maybe it's just a matter of time. The scenario described here would be outside the historical experience, but sometimes things really are different." "I think most people will agree that workers will adapt -- are adapting -- to these labor market shifts," Terrazas said. "So the question then becomes: Will they be better or worse off after the adaption? The Citrini authors seem to assume that people will adapt for the worse -- partial pivots like taking lower-paying or less prestigious work. I'm not sure that's always, or has to be, the case." So not everyone agrees that alarm is warranted. Even some top economic officials pushed back on the Citrini post directly, with Federal Reserve Governor Christopher Waller saying that "AI is a tool. It's not going to replace us as human beings. This is kind of an overstated thing." That view has history on its side. As Keum and Terrazas both noted, every prior wave of automation eventually created more jobs than it destroyed. But the historical arguments depend on a key assumption: that whatever new jobs emerge will require humans to do them. That assumption, for the first time, is genuinely in question. Previous technologies -- from the washing machine to the PC -- eliminated specific tasks while human creativity and judgement remained the irreplaceable inputs. We can't know that the future will look like the past. The Citrini post arguably moved markets precisely because it so vividly portrayed that this time could be different. The optimistic view holds that white-collar workers will adapt, and that they'll ultimately land somewhere better. Maybe that will prove true. But if the present moment is any indication, the future being built doesn't seem to be one where white-collar workers have more power. It seems to be one where they have less.

Jack Dorsey's Block cuts 50% of jobs as it embraces AI and shares jump

Block CEO Jack Dorsey has announced a radical restructuring that will see nearly half of the company's workforce made redundant. Shares surged by 23.5% in after-hours trading. In a move that has sent shockwaves through the fintech sector, Jack Dorsey, the co-founder and CEO of the fintech conglomerate Block, formerly known as Square, has unveiled the most aggressive corporate downsizing in the company's history. Block Inc. comprises several major fintech brands, namely the mobile payment service Cash App, which is widely used in the US. In a detailed note to the company, shared via X, Dorsey confirmed that the organisation will reduce its headcount by approximately 50%, representing almost 4,000 jobs. According to the CEO, the decision is not a sign of financial distress but rather a strategic evolution aimed at "re-centring" the company around a more efficient, AI-driven model. The news had an immediate and profound impact on Wall Street. Block's share price, under the ticker $XYZ, surged by 23.5% in after-hours trading as investors reacted with overwhelming optimism to the prospect of leaner operations. This shift reflects a broader trend within the tech and finance industries, where companies are increasingly using AI to "do more with less". However, the scale of Block's cuts is particularly striking. While many firms have implemented 5 or 10% reductions, Dorsey's decision to axe nearly half the workforce signals a total commitment to a new and automated era of corporate management. The central pillar of Dorsey's new strategy is the integration of generative AI and other automated systems into the core of Block's workflow. According to the note sent to employees, the former Twitter CEO believes that the rapid advancement of AI tools has rendered large, multi-layered corporate structures obsolete. Dorsey argued that "smaller and smarter" teams can now achieve outcomes that previously required hundreds of personnel. "We no longer need the mass of people we once did to maintain our velocity," the Block CEO wrote in the memo highlighting that AI-assisted coding and compliance systems, as well as automated customer support, have significantly reduced the man-hours required to run a global financial platform. By leveraging these technologies, Block intends to maintain its current product output while drastically reducing its overhead costs. Analysts suggest that this could save the company billions of dollars annually, with some estimates putting the potential savings already at $1.2bn (€1bn) this fiscal year. For a company that has long been at the forefront of digital payments and crypto, this AI pivot represents a significant departure from traditional scaling methods. The sheer scale of the layoffs raises the notion that we are perhaps entering the accelerated stage of AI driving people out of work. It is still early days in 2026 and companies are seemingly starting to make substantial restructurings instead of just small and strategic firings. The socio-economic shocks of the AI revolution now appear to be materialising in a very concerning and real way.

In a 600-word X post, Jack Dorsey justifies his decision to lay off 40% of Block's workforce

On Thursday, Block CEO Jack Dorsey announced that his fintech company, which owns Square and Cash App, would be laying off a whopping 40% of its workforce, slashing over 4,000 jobs. Despite a "strong year" in 2025, Dorsey -- like many of his tech executive peers -- believes AI will enable greater efficiency with far fewer workers. "Intelligence tools have changed what it means to build and run a company," he wrote in a letter to shareholders. "We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better." A number of business leaders have seemingly used AI as a smokescreen for layoffs, but Dorsey has explicitly attributed the job cuts at Block to "intelligence," which he claims will be "at the core of how the entire company works." Dorsey attempted to explain his decision in a memo to employees, which he shared publicly on X (also known as Twitter, the company Dorsey once cofounded). "I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now," he wrote. "I chose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead." (Block has, in fact, been laying off employees in waves this month, according to multiple reports.)

Jack Dorsey's Block cuts 4,000 citing AI as the cause

Block opened a new strategic European hub in Dublin late last month. Block is cutting 4,000 jobs - or around 40pc of its global workforce - as, according to company co-founder and chair Jack Dorsey, AI tools and flatter teams are proving more productive. In a lengthy post on X, Dorsey stated that he made the decision to cut jobs after realising how small teams and intelligence tools have enabled a "new way of working" that "fundamentally changes" things. He maintained that the job cuts were not a cost saving measure. "Our business is strong. Gross profit continues to grow...and profitability is improving", he added. He also doubled down on his decision in a letter to the shareholders, stating that a "majority" of companies will reach similar conclusions around smaller teams and make similar structural changes within the next year. As pointed out by major publications, Block has conducted several rounds of layoffs in recent years, but it has never cited AI as a reason for the redundancies before. The company previously laid off Irish employees in 2024 as part of its then plans to cut around 1,000 people across the company globally. The layoffs come after the global fintech giant opened a new Dublin office late last month where it plans to situate 300 of its workers. SiliconRepublic.com has asked Block what impact the layoffs would have on its Irish employees. Block shares rose by more than 24pc following the announcement, which came alongside a pleasant Q4 report boasting a 24pc year-over-year growth in gross profit, marked by a 51pc growth in financial solutions and a 10pc growth in bitcoin ecosystem. As of 2025, Block had 10,205 full-time employees globally, with 2,472 of them working from outside the US. According to Block's US government filings, the layoffs will be completed by the end of Q2 and will cost the company anywhere between $450m and $500m. Block, formerly known as Square until 2021, is the operator behind popular fintech services, including the consumer-focused Cash App and seller-focused Square. Just last month, Amazon announced that it is cutting 16,000 roles across its departments internationally to, according to the company, reduce organisational layers and remove bureaucracy. The company employs more than 6,000 across various sites in Dublin, Cork and Drogheda. RTÉ reported that around 300 Ireland-based jobs would be at risk. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news. Jack Dorsey, 2018. Image: © Mark Warner via Flickr (CC BY 2.0)

Block rallies after Dorsey slashes 40% of workforce in AI-native reset as earnings top estimates - SiliconANGLE

Block rallies after Dorsey slashes 40% of workforce in AI-native reset as earnings top estimates Shares in Block Inc. surged more than 23% in late trading today after the financial services company announced that it was laying off more than 4,000 people from its approximately 10,000-strong workforce alongside an earnings beat in its fiscal 2025 fourth quarter. For the quarter that ended on Dec. 31, Block reported adjusted earnings per share of 65 cents, up from 47 cents in the same quarter of 2024, on revenue of $6.25 billion, up 3.6% year-over-year. The earnings figure came in ahead of the 64 cents per share expected by analysts, while Block's revenue fell short of an expected $6.29 billion. Block saw growth in two of its three revenue segments, with commerce enablement revenue coming in at $3.05 billion, up 11.1% year-over-year and financial solutions revenue growing 47.9% year-over-year to $1.222 billion. Conversely, the company's bitcoin ecosystem saw revenue decline 19.6% year-over-year to $1.98 billion amid a bear market for cryptocurrencies. The company's gross profit was up 24% year-over-year to $2.87 billion, boosted by a 33% increase in Cash App revenue driven by higher user engagement and conversion and a 12% year-over-year increase in Square gross payment volume. The specific figures were definitely not what investors were paying attention to, however, with Block Chief Executive Officer Jack Dorsey starting the company's Q4 2025 Shareholder Letter with the news of the layoffs. The layoffs are described as a restructuring designed to better align Block's organization with its operating model and long-term strategy, with Dorsey saying the company is reshaping itself around smaller, more focused teams intended to move faster and execute more efficiently, particularly as artificial intelligence becomes more embedded in its product development process. The cuts are framed as a deliberate effort to raise performance standards and reduce organizational complexity. The shareholder letter emphasizes that Block wants to flatten its structure, clarify accountability and concentrate resources around its highest-priority initiatives across Square, Cash App and its broader ecosystem. Dorsey also characterized the move as one focused on making Block a leaner, AI-native organization and that automation and improved tooling allow the company to operate effectively with fewer people. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We're already seeing it internally," said Dorsey. "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." For its fiscal year 2026, Block is forecasting gross profit of $12.2 billion and adjusted earnings per share of $3.66. The latter figure came in ahead of the $3.22 expected by analysts.

She joined Block to build AI. Weeks later, AI cost her job. | Fortune

On Thursday, Jack Dorsey, CEO and founder of Block -- parent company of Square and Cash App -- announced plans to cut more than 4,000 jobs, roughly 40% of the workforce, reducing headcount from over 10,000 to just under 6,000 as part of a sweeping restructuring. Dorsey tied the cuts directly to efficiency gains from the company's AI rollout, Fortune reported. "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," he wrote in a post on X. The announcement, delivered just ahead of Block's earnings report, sent shares up more than 20% in after-hours trading. In a Thursday note, Morningstar Senior Equity Analyst Brett Horn wrote that Block's fourth-quarter growth accelerated meaningfully and that management's 2026 guidance calls for material margin improvement as the company dramatically lowers its headcount. He maintained an $83 fair value estimate. Still, Horn cautioned: "The long-term impact of dramatically reducing staff and betting on AI productivity gains is uncertain, in our view." Among those affected is Debbie O'Brien, a senior staff developer relations engineer in Applied AI at Block based in Mallorca, Spain. She had joined only weeks earlier to help developers adopt AI workflows using agents and the Model Context Protocol. According to her website, she has more than 15 years of experience in frontend development, over 20,000 <a href="https://www.linkedin.com/in/debbie-obrien/">LinkedIn</a> followers, and 10,000 YouTube subscribers. Fortune reached out to O'Brien, but didn't receive a response as of press time. In a candid YouTube video posted Friday, O'Brien described learning -- indirectly at first -- that she might be among those laid off. She was in a training session when a manager abruptly ended the call and instructed everyone to check their email. Colleagues began posting in Slack that they had been "cut," but O'Brien saw only Dorsey's broad memo, not an individual notice. Hours passed without clarity. "I don't know. Do I have a job? Do I not have a job?" she recalls. Near 12:30 a.m., she said, "I opened the computer, and I just looked, and there I saw the DocuSign, basically the official termination process, and that I read through and had to sign, and then I have a meeting today to basically tell me how to return the computer and things like that. So at least that meant I could sleep, because then I knew, actually, I don't have a job anymore." O'Brien had been working on Goose, Block's open-source AI agent framework built around the Model Context Protocol. She says the team was "on the bleeding edge," rapidly shipping automations -- from tools that generate release notes and videos in minutes to agentic flows that let users order food through ChatGPT, powered by Block's payments rails. She is careful not to single out Dorsey, her managers, or Block's leadership, describing the move instead as a binary "light switch" decision about risk and survival -- one that other companies may soon confront. But she is blunt about the broader lesson: "Our future is unstable in the tech industry." After back-to-back layoffs -- first from Microsoft and now Block -- she says she no longer sees tech roles as inherently secure, even in high-demand fields like AI. Her advice is pragmatic: get personal finances in order, reduce fixed costs like housing, and plan for the possibility of repeated disruption.

Jack Dorsey Lays Off 4,000 Employees After Move to AI

Can't-miss innovations from the bleeding edge of science and tech After taking his company, Block Inc -- formerly Square Inc -- to a market cap of over $30 billion, billionaire entrepreneur Jack Dorsey has laid off nearly 40 percent of the fintech giant's staff. In a long, rambling post on X-formerly-Twitter -- Dorsey's original baby, infamously -- the Block CEO admitted the company's executives were slashing thousands of jobs in order to embrace AI. "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," Dorsey wrote. "That means over 4,000 of you are being asked to leave or entering into consultation." Crucially, Dorsey highlighted that the company is on sound financial ground. Instead, he says the issue is that it just doesn't need all those people anymore. "We're not making this decision because we're in trouble. our business is strong," he asserted. "Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving." But, Dorsey continued, "something has changed." "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," he continued, "and that's accelerating rapidly." The tech billionaire also has a warning for the rest of the country's workers, saying that any company not doing the same is "late." "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," Dorsey wrote. While tech giants like Amazon and eBay are indeed cutting jobs by the ton, it's highly unlikely AI is taking them. AI's 95 percent failure rate at driving revenue notwithstanding -- an oft-cited finding from 2025 that often appears more and more prescient as time goes on -- there's compelling evidence that big tech's layoff spree is driven by the past, not the future. In the wake of the COVID-19 pandemic, companies around the US added thousands of staffers to their payroll, Block included. (As Cybernews observes, Block's workforce exploded from 3,900 in 2019 to 12,500 in 2022.) Luckily for it, AI arrived just as companies needed to correct their pandemic hiring sprees -- offering executives a convenient excuse for mass layoffs. Even Dorsey admits "yes we over-hired during [COVID]," which he blames on organizational issues, or, as he puts it, "because i incorrectly built [two] separate company structures (square & cash app) rather than [one]." "So you over-hired, overbuilt, and now you're celebrating efficiency while people lost jobs," one poster replied under Dorsey's post. "Must be nice to treat human beings like spreadsheet errors." All in all, it's probably cold comfort for the thousands of workers who'll soon be out of the job. AI might not be replacing them, but it makes a trendy excuse for the likes of Dorsey.

Jack Dorsey's Block to cut over 4,000 jobs as AI use expands, shares surge

Feb 26 (Reuters) - Block (XYZ.N), opens new tab on Thursday said it will cut over 4,000 jobs, or nearly half its workforce, as advances in AI reshape how it builds and runs its business, sending its shares up 22% in after-hours trading. The layoffs underscore how the AI boom is translating from hype into workforce changes, fueling long-held concerns among workers and economists that the technology could eliminate roles even as it boosts productivity and profits. "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," CEO Jack Dorsey said in a statement. "I don't think we're early to this realization. I think most companies are late," he added. In a post on social media platform X, Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. He said a smaller company would also give it space to grow the business the right way, instead of constantly reacting to market pressures. Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale at which the technology is starting to translate into lower expenses and higher margins in some industries. The company said it expects to incur roughly $450 million to $500 million in restructuring charges. Block posted an adjusted profit of 65 cents per share in the three months ended December 31, compared with 47 cents a year earlier. Gross profit grew 24% in the quarter, driven by a 33% surge in the Cash App business, which enables peer-to-peer mobile payments. Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab

Fintech company Block lays off 4,000 of its 10,000 staff, citing gains from AI

BANGKOK (AP) -- Shares in the financial technology company Block have soared more than 20% in after-hours trading after its CEO announced it was laying off more than 4,000 of its 10,000 some employees due to its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to Square and CashApp. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. Their assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months. Apart from Block, a number of other high-profile companies have announced layoffs recently, including UPS, Amazon, Dow and the Washington Post.

Jack Dorsey's Block Announces 4,000 Job Cuts in AI Overhaul

Bloomberg reported earlier this month that 10% of Block's workforce could be cut during annual performance reviews as part of a broader overhaul. Jack Dorsey's payments company Block will cut over 4,000 of its staff, with its co-founder pinning the move on the rapid acceleration of AI. "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," wrote Dorsey in a letter to the company, which he shared on X. "I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead," he added. Affected staff will still receive their salary for 20 weeks, plus one week per year of tenure, six months of health care, their corporate devices, and $5,000 to help them transition to a new role, said Dorsey. Bloomberg reported earlier this month that 10% of Block's workforce could be eliminated during annual performance reviews, as part of a wider restructuring effort.

Block Shares Soar as Dorsey Leans on AI to Trim Workforce

Feb 27 (Reuters) - Block shares soared more than ⁠20% ⁠in premarket trading on ⁠Friday after it announced it would nearly halve its workforce as part of an overhaul to embed artificial intelligence tools across its operations. The layoffs are the most visible signs of how the U.S. fintech industry is navigating ⁠the ⁠impact of AI, with its CEO, tech billionaire Jack Dorsey, warning that most companies were "late" to realize the emerging technology's potential. "At its core, it's about how some companies may be run going forward - not just doomsday headcount reductions, but also enabling higher ROI investments in growth and FCF," ⁠analysts ⁠at Evercore ISI wrote, ⁠referring to free cash flow. Accelerating AI adoption is helping companies to cut jobs in divisions most exposed ⁠to automation. Economists at Goldman Sachs have estimated that AI was responsible for job losses amounting to a 5,000 to 10,000 hit to average monthly job growth in the industries most exposed to it in ⁠2025. Block was one of the companies that aggressively hired during the pandemic ⁠as the use of digital payments and online commerce spiked. "In Block's case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat," said Matt Britzman, an analyst at Hargreaves Lansdown. Its workforce jumped from about 3,800 employees in 2019 to more than 10,000 in 2025 as Block battled increasing pressures from rising competition in its payments and buy-now-pay-later ⁠segments. "While the RIF (reduction in force) is large, it does bring Block's headcount back toward pandemic-era levels, making it a standout in gross profit per employee, well ahead of its peers including Visa," JPMorgan analysts said. (Reporting by Utkarsh Shetti and Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)

Block laying off 40 percent of staff, citing AI advancements

Block, the parent company of payment apps Square, Cash App and Afterpay, is laying off more than 40 percent of its staff, pointing to recent advancements in artificial intelligence that are "enabling a new way of working." The company's CEO, Twitter co-founder Jack Dorsey, announced Thursday that they were reducing the company from over 10,000 employees to just under 6,000. "[W]e're not making this decision because we're in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving," he wrote in a note shared to social platform X. "[B]ut something has changed. 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," the CEO added. Dorsey, who founded the payments company in 2009, argued that a smaller firm "gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures." The massive layoffs come as the rise of AI has increasingly raised concerns about the future of work. Some AI leaders, such as Anthropic CEO Dario Amodei, have previously warned the technology could result in steep cuts to entry-level white-collar jobs. Others, like OpenAI CEO Sam Altman, have acknowledged there will likely be an impact on jobs but have suggested it would be more modest. Federal Reserve governor Lisa Cook warned Tuesday that AI could cause "job displacement" while preceding "job creation," noting that this could result in "hardship for many workers and their families." Speaking the National Association for Business Economics (NABE) Economic Policy Conference, she added that evidence of this transition has emerged, "even if it is too soon to see the effects in the aggregate."

After Slashing 4,000 Jobs at Block, Jack Dorsey Blames AI. Critics Are Lighting Him Up

"I'll be straight about what's happening, why, and what it means for everyone," Dorsey wrote, outlining a severance package that includes 20 weeks of salary, an additional week per year of tenure, equity vesting through the end of May, six months of healthcare coverage, corporate devices, and $5,000 for transition expenses. Dorsey insisted the cuts were not a sign of distress. "We're not making this decision because we're in trouble," he wrote, pointing to growing gross profit and an expanding customer base. Instead, he argued, "something has changed." "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," he wrote. That shift, he added, "fundamentally changes what it means to build and run a company."

Jack Dorsey's fintech company Block is laying off thousands, citing gains from AI

CEO Jack Dorsey announced the firm was laying off more than 4,000 of its 10,000-plus employees. Shares in the financial technology company Block soared more than 20% in premarket trading Friday after its CEO announced it was laying off more than 4,000 of its 10,000 plus employees, reconfiguring to capitalize on its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to online payment platforms such as Square and Cash App. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. The assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," Stephen Innes of SPI Asset Management said in a commentary. "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not," he said. A global technology company founded in 2009, San Francisco-based Block operates in the United States, Canada, parts of Europe, Australia and Japan. In a post on Twitter, Dorsey outlined various ways the company will support those laid off. For employees overseas, the terms might differ, he said. It was unclear which employees would be laid off where. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months. A number of other high-profile companies have announced layoffs recently, including UPS, Amazon, Dow and the Washington Post.

Block CEO Jack Dorsey lays off nearly half of his staff because of AI and predicts most companies will make similar cuts in the next year | Fortune

In recent weeks, the tech world has been abuzz with AI "jobpocalypse" warnings. Microsoft AI chief Mustafa Suleyman warned that white-collar jobs had a year to 18 months before widespread job displacement. Former presidential candidate Andrew Yang and JPMorgan Chase CEO Jamie Dimon concurred. These threats have caused many professional workers' stomachs to churn as they fear for their heads. Now, Jack Dorsey's payments firm Block has made a move that vindicates some of the fears of the AI doomers. The Block founder announced Thursday the company would be laying off nearly half of its workforce, cutting 4,000 employees, down to just under 6,000 workers from over 10,000. Dorsey didn't mince words in an X post announcing the cuts, tying the layoffs directly to an efficiency boost from the company's AI implementation. "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," he wrote. Block's layoffs mark one of the most significant and bold AI-driven workforce reductions yet in S&P 500 history. Dorsey added that his company isn't alone in reaching its conclusion on AI and predicted that others will follow. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he wrote in a separate letter to shareholders. While Dorsey noted part of the layoffs were a reaction to overhiring during COVID, the layoffs follow AI-driven doomsday anxiety among workers and investors alike. Citrini's "Global Intelligence Crisis" Substack post imagined a scenario in 2028 where unemployment tops 10% and the S&P 500 tanks. But AI layoffs may not be as they appear. A Oxford Economics report released in January found that many layoffs that CEOs claimed were due to AI were actually in reaction to past overhiring. Where companies stand with AI implementation Still, some experts warn Block's layoffs could trigger the reality depicted in Citrini's viral post, setting in motion a chain reaction of layoffs across the professional landscape. "Whereas the job market effects of AI in 2025 were still quite ambiguous, AI capabilities have advanced rapidly in the past few months," Anton Korinek, an economist who focuses on the economic impact of transformative AI, told Fortune. "This may be the beginning of a new trend where white collar jobs become threatened more seriously by AI. Once a few companies start the trend, competitive forces may induce others to follow suit." But Dorsey's statement comes as companies are still in the early stages of AI adoption. A 2025 McKinsey report found that most firms are still experimenting with AI implementation, and nearly two-thirds have yet to scale the technology. Moreover, a recent survey of 6,000 CEOs and other executives of firms across the U.S., U.K., Germany, and Australia from the National Bureau of Economic Research found that AI has yet to show any major impact on their operations. For Block, AI implementation has bolstered the company's operations. "We're not making this decision because we're in trouble," Dorsey noted in his X post. "Our business is strong." The company reported a gross profit of $2.87 billion in the fourth quarter, up 24% year over year. Dorsey also said the company's customer base is expanding and profitability is improving, which he attributed to AI implementation. The stock market has reacted positively to the decision. Block was up nearly 18% on Friday as investors bet on productivity gains from AI. Dorsey said the layoffs come in anticipation of an ensuing trend, allowing the company to act proactively: "I'd rather get there honestly and on our own terms than be forced into it reactively."

Block Lays Off 40% of Staff Citing AI. CEO Dorsey Says Other Firms Will Make Similar Moves.

Almost 30,000 people across 45 tech companies have been laid off since the start of the year. As artificial intelligence technology advances, more people are likely to lose their jobs, according to one high-profile tech CEO. Jack Dorsey, chief of fintech shop Block (XYZ), delivered the foreboding message on Thursday after announcing the company will lay off more than 4,000 people, representing nearly half of its existing staff of 10,000. Block, which owns Square and Cash App, had a "strong year" in 2025, but the advances in artificial intelligence tools have "changed what it means to build and run a company," Dorsey said in a shareholder letter published alongside its fourth-quarter earnings results. Shares of Block were up 15% recently, after surging as much as 21% earlier in the session in response to the news. The company, formerly called Square, is the latest tech firm to slash its headcount. Others including eBay (EBAY), Salesforce (CRM), Workday (WDAY), Zillow (Z) and Amazon (AMZN) have all announced job cuts in the last couple of months, with some citing AI as the primary driver. Dorsey said other companies are likely to make similar workforce decisions. "I don't think we're early to this realization. I think most companies are late," he said. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes." Dorsey, who famously founded social media platform Twitter, said AI tools were now at a state that could fundamentally transform how companies operate, and the firm would put AI at the core of how "the entire company works." During the company's earnings call, he said that its smaller, nimbler workforce would be better positioned to experiment and create new products faster, per a transcript provided by AlphaSense. Dorsey also said that the company may have "application gap" in its use of AI, but planned to use those tools more aggressively. So far this year, almost 30,000 people across 45 tech companies have been handed their walking papers , according to data compiled by layoffs.fyi, which has been tracking job cuts since 2020. More than half of that represents Amazon's layoffs, which last month announced it was reducing its workforce by 16,000 people. Despite the big gain on Friday, shares of Block remain in negative territory in 2026.

Block, A.I. and the Front-Running of the Curve

Jack Dorsey's bold move may signal an architectural realignment in the A.I. stack. When Jack Dorsey announced last week that Block -- the parent company of Square, Cash App and Afterpay -- would cut its workforce by 40 percent, axing more than 4,000 jobs and reducing its headcount to less than 6,000, the reaction of capital markets was immediate and brutal in its clarity: Block's stock had surged more than 22 percent in after-hours trading. Analysts described it as a kind of a seminal moment. Dorsey called it inevitable and warned that the majority of companies would follow suit within the year. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters It is not merely a story of restructuring. This is one stress test of the defining question of the A.I. era: Has artificial intelligence gone from being a productivity enhancer to a structural headcount reducer? What the market is actually rewarding The stock surge delivers an important and, honestly, rather uncomfortable message. Investors are not rewarding Block because A.I. has definitively proven it can operate a fintech at half the human cost. They are rewarding the margin thesis. Block guided its adjusted operating profit margin to reach 26 percent in 2026, up from 17 percent in 2025. That's a very interesting number, and capital markets are pricing in wishful thinking. However, the reality is that much of what is being celebrated is expected efficiency rather than demonstrated efficiency. A Harvard Business Review study published in January found that companies are mostly laying off workers largely based on A.I.'s projected potential -- not its proven performance. After years of heavy infrastructure investment, markets are under pressure to find returns. As a result, they are rewarding the signal of ambition as much as the reality of operational execution. That distinction is an enormous one. Is the white-collar contraction starting? Yes and no. The honest answer is that this is both in the structural sense real and in the strategic sense accelerated. A.I. is already automating some categories of white-collar work: code writing, compliance documentation, data synthesis and customer query routing. These are real efficiencies. Block reportedly automated significant portions of its software engineering processes prior to making these cuts. That is not fiction. But a 40 percent reduction in headcount at this point in the adoption of A.I. is front-running the curve at the very least. Human judgment, situational thinking, institutional knowledge and the type of adaptive problem-solving that fintech at scale requires have not been reliably substituted yet. The operation of payments infrastructure in multi-geographies, regulator relationships management and trust at the consumer level carries layers of human responsibility and accountability that current A.I. systems are not fully absorbing. Dorsey may be right that others will follow. But the fastest followers may not be the ones who fail the most or the most resilient. The firms that jump on this moment as a competitive signal to cut headcount without real operational A.I. readiness are taking an actual risk, not only to their execution, but to their institutional knowledge base. What Dorsey got right all along Despite the warranted skepticism around timing, it would be intellectually dishonest not to acknowledge how this was handled. The severance package, which reportedly includes a minimum of 20 weeks of base pay with additional compensation based on tenure, is said to be among the most generous in recent tech history. Dorsey's internal memo was direct and transparent. He did not just hide behind the typical "restructuring" language. He explicitly cited A.I., owned the decision and treated his employees with economic dignity. In an environment full of cunning and opaque right-sizing messages and cloudy severance terms, one should appreciate that clarity. Leaders who are honest about transformational disruptions -- even uncomfortable ones -- earn a different sort of trust from the market, from employees and from the public. This is a leadership posture more executives should learn from. What this means to the A.I. ecosystem To me, this moment represents an architectural realignment. This is an essential change in where the value is captured across the A.I. stack. With each change, it is worth looking a level below the model layer to fully understand it. Models, compute and APIs are becoming centralized and commoditized. More consequential is that we are witnessing the emergence of the temporal agentic operating system (TAOS), an execution infrastructure layer that enables A.I. agents to coordinate workflows, maintain state and execute consistently across complex operational environments. This is not characteristic of the models. This intelligent operating layer is the one that will make A.I. evolve from a mere productivity tool to a real hybrid workforce enabler -- and it is growing rapidly. Block's move is a bold bet. If the A.I. tooling works out, Dorsey will look like a visionary. When operational loopholes arise, though -- in governance, in product excellence, in client confidence or all the above -- accountability will be just as transparent. The lesson for the industry is simple. Don't just copy the percentage. Understand what the temporal agentic OS can do for you sustainably -- and design your human organization around what it cannot. Yousef Khalili is the Global Chief Transformation Officer and CEO MEA at Quant, which develops cutting-edge digital employee technology.

Jack Dorsey's blunt AI warning sharpens debate over jobs and profits - The Economic Times

Block shares rose sharply on ⁠Friday, underscoring ⁠how markets are increasingly rewarding companies that present AI not as an experiment but as a driver of structural change. Dorsey also delivered a blunt warning to peers: most companies are behind the AI curve and will reach the same conclusion within a year.Jack Dorsey is not the first chief executive to say artificial intelligence will transform work. He may be among the first to act as if it already has - and to say so openly. "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," Block CEO and co-founder said in a statement on Thursday. "I don't think we're early to this realization. I think most companies are late," he added as he laid out plans to cut over 4,000 jobs, nearly half the company's workforce, as part of an overhaul to embed AI across the fintech's operations. Block shares rose sharply on ⁠Friday, underscoring ⁠how markets are increasingly rewarding companies that present AI not as an experiment but as a driver of structural change. Dorsey also delivered a blunt warning to peers: most companies are behind the AI curve and will reach the same conclusion within a year. "I'd rather get there honestly and on our own terms than be forced into it reactively." Until now, most executives have resisted those kinds of sweeping conclusions even as their firms pour billions into the technology. The comments are likely to sharpen a growing debate among executives, economists, investors and policymakers: is AI primarily a tool that helps workers do more - or one that enables companies to do the same with far fewer people? AI job cuts accelerate AI-linked layoffs have been rising worldwide. According to a Reuters tally, companies have announced more than 61,000 job cuts tied to AI, including Amazon, Pinterest and ⁠Australia's Wisetech since November. But Block is among the highest-profile companies to cite AI explicitly as the primary driver of its reductions, rather than a secondary efficiency gain. Some investors argue that automation-related cuts are partly correcting for years of overhiring. "AI is the new scapegoat," said Brian Jacobsen, chief economic strategist at ⁠Annex Wealth Management, on Friday. Still, markets are increasingly uneasy about AI's potential to upend jobs and profits amid an uncertain global economic backdrop. A widely circulated report this week by Citrini Research outlined a 2028 scenario in which unemployment rises to 10.2%, driven by rapid displacement of workers in software, logistics and delivery roles. Businesses have been more guarded Evidence is emerging that firms are beginning to see returns on their investment. Morgan Stanley analysts said this week there has been a steady rise in the number of companies reporting quantifiable benefits from AI adoption, based on an analysis of more than 10,000 earnings calls and fourth-quarter conference transcripts. Some 21% of S&P 500 companies mentioned at least one measurable benefit, up from 15% in the third quarter and 10% in the final quarter of 2024. Greater AI use will boost companies' profit margins by 40 basis points this year, they estimate. But until now, most executives and policymakers have been more guarded than Dorsey when talking about AI and jobs. "What we are seeing for the moment is that it's increasing productivity," ECB President Christine Lagarde told a committee of the European Parliament on Thursday. "But we are not yet seeing consequences in terms of labour market and waves of redundancies that are ⁠feared, and that you know we will be extremely attentive going forward." At the World Economic Forum last month, JPMorgan Chase CEO Jamie Dimon said jobs would disappear but new ones would emerge. On Friday, Bank of America global economists Claudio Irigoyen and Antonio Gabriel said AI could ultimately affect a quarter of all jobs. AI shock, they said, will be disruptive for companies that do not survive and for workers who are displaced, but the economy will be better off because it will create new jobs and business opportunities that were previously prohibitive. Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors, warned of unintended consequences from drastic steps like Block's. "Dorsey's strategy suggests that less is more and that human capital has lost its competitive edge," he said. "The question is whether the company is resetting to its smaller, nimbler startup days or whether it might lose the creativity and human intuition that built its most iconic products in the first place."

Jack Dorsey's Block to lay off 4000 employees as the AI era arrives

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Dorsey's move to reduce Block's headcount from more than 10,000 to just under 6,000 won favour with the markets, sending the share price of the firm behind Square and Cash App soaring by as much as 24% in extended trading on Thursday. Explaining the decision in a letter to shareholders, Dorsey writes: "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 we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week." While it has long been predicted that the rise of AI will have seismic effects on the job market, the size of the reductions at Block coupled with Dorsey's explicit reasoning mark a shift in the debate. And Dorsey predicts that Block will soon be followed by others: "I don't think we're early to this realisation. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively." In the short term, Block expects to incur charges of $450 million to $500 million, consisting primarily of severance payments, employee benefits and noncash expenses related to share vesting. Dorsey emphasises that the job cuts are being made from a position of strength, coming as Block reports fourth quarter adjusted earnings per share of 65 cents on revenue of $6.25 billion. Gross profit increased 24% year-on-year to $2.87 billion.

Fintech Company Block Lays off 4,000 of Its 10,000 Staff, Citing Gains From AI

BANGKOK (AP) -- Shares in the financial technology company Block have soared more than 20% in after-hours trading after its CEO announced it was laying off more than 4,000 of its 10,000 some employees due to its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to Square and CashApp. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. Their assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months. Apart from Block, a number of other high-profile companies have announced layoffs recently, including UPS, Amazon, Dow and the Washington Post.

Wall Street Is Cheering AI-Driven Layoffs

Want more stock market and economic analysis from Phil Rosen directly in your inbox? Subscribe to Opening Bell Daily's newsletter. Wall Street is excited for Block to move forward with fewer humans and more AI. The Jack Dorsey-led company announced it will cut more than 4,000 employees, or about half its workforce, and investors aggressively piled into the stock on the news. While Block did report solid earnings, the stock soared more than 24 percent after hours largely on account of its restructuring. In an internal memo Dorsey released publicly, he called out "intelligence tools" and "smaller and flatter teams." The layoffs, he said, are the result of him choosing decisive action over gradual attrition. "A decision at this scale carries risk," Dorsey said. "But so does standing still."

Balaji Srinivasan Says Block Firings Will Send 'Shockwaves,' Angel Investor Says Jack Dorsey Is Signalling Everyone -- xAI Makes Moves On Talent - Block (NYSE:XYZ)

On Thursday, Elon Musk's xAI began recruiting shortly after Block Inc. (NYSE:XYZ) announced it would cut nearly half its workforce in a sweeping efficiency push tied to artificial intelligence. Block Cuts 4,000 Jobs In AI Efficiency Overhaul Block said it is reducing headcount from more than 10,000 employees to just under 6,000, eliminating over 4,000 roles as part of what CEO Jack Dorsey described as a difficult but necessary restructuring. "Today we shared a difficult decision with our team," Dorsey wrote in a letter to shareholders. The company said affected employees will receive 20 weeks of pay, six months of health coverage and vested equity. Investors Call It A Turning Point For AI And Tech Jobs Following the announcement, Gene Munster, managing partner at Deepwater Asset Management, said the move underscores how quickly AI is reshaping corporate strategy. "AI's impact just hit a new gear," Munster said, adding that the industry remains early in the transition. "We're in the second inning." Silicon Valley investor Balaji Srinivasan characterized the announcement as a signal moment for the tech sector. "This is the first AI cut. And it will send shockwaves," Srinivasan wrote on X. He urged workers to adopt AI tools and boost productivity, warning that companies that fail to adapt risk falling behind competitors embracing automation and agent-driven workflows. "There will be overcorrection. But the fundamental technical innovation is real. And you need to either disrupt yourself or get disrupted," he stated. xAI Signals Hiring Push Amid Layoffs Shortly after the announcement, a talent executive from xAI posted on X, inviting affected Block employees to apply, writing that "X Money is hiring." Musk touted the idea of a cryptocurrency-enabled "everything app" tied to X Money last year, though the company has yet to provide any substantive updates or formal launch details. Price Action: Shares of Block, Inc. surged 23.52% in after-hours trading to $67.36 after climbing 4.99% during the regular session, according to Benzinga Pro. XYZ continues to trade in a negative trend across the short, medium and long term, accompanied by a weak Momentum ranking, according to Benzinga's Edge Stock Rankings. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Sergei Elagin via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Jack Dorsey lays off 40% of Block, saying AI has changed the game: 'Intelligence tools have changed what it means to build and run a company' | Fortune

Shares in the financial technology company Block soared more than 20% in premarket trading Friday after its CEO announced it was laying off more than 4,000 of its 10,000 plus employees, reconfiguring to capitalize on its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to online payment platforms such as Square and Cash App. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. The assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," Stephen Innes of SPI Asset Management said in a commentary. "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not," he said. A global technology company founded in 2009, San Francisco-based Block operates in the United States, Canada, parts of Europe, Australia and Japan. In a post on Twitter, Dorsey outlined various ways the company will support those laid off. For employees overseas, the terms might differ, he said. It was unclear which employees would be laid off where. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months.

Block's A.I. Layoffs Signal a Tipping Point for White-Collar Work

As A.I. matures, competition may shift from human capital to computing power and subscription-based intelligence. Block CEO Jack Dorsey's announcement of an A.I.-driven 40 percent reduction in the company's workforce -- followed by other major firms justifying their own workforce reductions as A.I.-related -- triggered immediate speculation about A.I.'s impact on white-collar employment. While the news also prompted an immediate spike of more than 20 percent in Block's stock price, the more consequential issue is how A.I. will ultimately impact the future of employment -- positively or negatively. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters IDCA research indicates that more than 100 million new IT-related jobs worldwide will be required over the next decade to match the projected growth of large-scale A.I. factories and data centers that will fuel the digital economies they help create. Yet that same growth -- and the economic benefits A.I. promises -- are seriously threatened by the technology's potential to eliminate vast numbers of white-collar jobs. JPMorgan Chase CEO Jamie Dimon recently warned about the A.I. threat, urging that "now's the time" to start thinking about A.I.'s effect on company workforces -- before massive job losses actually materialize. In his view, his company is prudently integrating A.I. processes into its operations, even as it has what Dimon called "huge redeployment plans" to address the future of its workers. Sam Altman, CEO of OpenAI, said at an investor's conference in 2024, "We're going to see 10-person companies with billion-dollar valuations pretty soon...in my little group chat with my tech CEO friends, there's this betting pool for the first year there is a one-person billion-dollar company, which would've been unimaginable without A.I. And now [it] will happen." Unfortunately, it is very likely that too many companies will reflexively begin laying off their white-collar workforces in mass numbers, hollowing out their organizations, and potentially accelerating a broader global economic descent. The reality is that, at this stage, many of the layoffs would be a cyclical overreaction. The technology's maturity simply isn't yet sufficient to replace a fully functioning, experienced workforce. Many organizations lack clarity on which roles can be effectively replaced by A.I., or how they would fill operational gaps if A.I., in its current state, proves incapable of fully assuming those responsibilities. The irony is that while A.I. is a productivity enhancer for certain roles, for others, it is actually slowing production, narrowing the innovation spectrum and diminishing a company's ability to think outside the box. Thus, for the time being, A.I. cannot truly replace the human workforce. However, this is only the beginning. A.I. maturity and the mass replacement of the human workforce are likely just a matter of time. With immense computing capacity, access to abundant information and unprecedented levels of investment, A.I. will continue to become rooted in organizations, corporations and governments alike. Major layoffs will be coming, wave after wave. The problem is that these are professionals with solid education and seemingly solid positions: analysts, engineers and experts who maintain decent standards of living. Their displacement would represent an economic burden and a global social dilemma. More troubling still, no nation appears prepared for what's coming. Little serious consideration has been given to how middle-class unemployment spikes would be managed, or how social unrest and economic destabilization might be prevented. This signals that, if left unchecked, and assuming the world can generate sufficient energy to power the data centers required to fuel A.I.'s mature state, the A.I. ecosystem could ultimately replace most cognition-dependent jobs. Human cognition, our capacity to analyze, synthesize and generate meaningful solutions, remains one of the last key abilities not fully outsourced to machines. Yet as A.I.'s capabilities expand, its shadow grows while ours contracts. As this trend unfolds, we will lose our ability to work and perform, even if the jobs were available, which they will not be. Ultimately, competition itself could become a matter of subscription. Every role in the company will be outsourced to specialized A.I. agents that cater to each function's needs. A company's edge over another will be based on its ability to purchase the best A.I. and computing capabilities, not its human workforce. This will turn the competitive landscape into a gray and redundant spectacle. Can A.I. enhance access to information, aid research and boost scientific breakthroughs? Yes. Should we prevent technology from expanding and evolving? No, we should not. But there is a threat associated with unchained and unregulated A.I. development. There is a genuine need for clear, global guidelines governing A.I. deployment. Otherwise, humanity risks once again creating extraordinarily powerful tools without fully understanding -- or preparing for -- their long-term implications. The term "guardrails" is often invoked to describe what's needed to slow reckless policies of workforce elimination in favor of A.I. The word implies moderation, not overly restrictive or punitive regulation that acts as a disincentive to business. This is not a call for heavy-handed, E.U.-style intervention or policies that stifle innovation. Rather, it is a call for thoughtful leadership. Unless business and government leaders seriously confront the fundamental question of what massive A.I. layoffs would actually accomplish -- and what unintended consequences they may unleash -- we will continue to live in the shadow of profound economic and societal uncertainty. Mehdi Paryavi is the CEO and founder of the International Data Center Authority (IDCA), the world's leading Digital Economy think tank. Read their 2026 Global Digital Economy Report.

US Stocks: Block shares soar 16% as Jack Dorsey leans on AI to trim workforce

Block shares soared more than 16% on Friday after the fintech firm announced it would nearly halve its workforce as part of an overhaul to embed artificial intelligence tools across its operations. Block shares soared more than 16% on Friday after the fintech firm announced it would nearly halve its workforce as part of an overhaul to embed artificial intelligence tools across its operations. The layoffs are the most visible signs of how the industry is navigating the impact of ⁠AI, with ⁠Block's CEO, tech billionaire Jack Dorsey, warning that most companies were "late" to realize the emerging technology's potential. "At its core, it's about how some companies may be run going forward - not just doomsday headcount reductions, but also enabling higher ROI investments in growth and FCF," analysts at Evercore ISI wrote, referring to free cash ⁠flow. Accelerating AI adoption is helping companies to cut jobs in divisions most exposed to automation. Economists at Goldman Sachs have estimated ⁠that AI was responsible for job losses amounting to a 5,000 to 10,000 hit to average monthly job growth in the industries most exposed to it in 2025. Block was one of the companies that aggressively hired during the pandemic as the use of digital payments and online commerce spiked. "In Block's case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat," said Matt Britzman, an analyst at Hargreaves Lansdown. The company's workforce jumped from ⁠about 3,800 employees in 2019 to more than 10,000 in 2025 as it battled increasing pressures from rising competition in its payments and buy-now-pay-later segments. "While the RIF (reduction in force) is large, it does bring Block's headcount back toward pandemic-era levels, making it a standout in gross profit per employee, well ahead of its peers including Visa," J.P. Morgan analysts said.

Block Strategy Points to AI Shaping Corporate Infrastructure | PYMNTS.com

In a note posted on X, Dorsey called the layoffs "one of the hardest decisions" Block has made and said leadership chose a single, decisive action instead of multiple smaller rounds that would "erode morale and focus." The announcement came alongside earnings that showed continued gross profit growth, and shares rose following the news. Block said the reductions are not tied to weakening demand or balance-sheet strain. Instead, Dorsey framed the move as a structural reset around productivity gains from AI and a shift toward flatter teams. Block's explanation reflects a broader transition underway across technology and financial services firms. As AI systems increasingly draft code, automate internal documentation, analyze risk signals and handle portions of customer support, the amount of human labor required for certain workflows changes. Organizations are reassessing team size relative to output. Microsoft's 2025 Work Trend Index describes the rise of what it calls the "Frontier Firm," an enterprise model in which AI functions as an embedded operating layer. In this structure, employees work alongside AI agents that augment productivity across departments. The result is not necessarily fewer ambitions, but a different calculus around staffing. Block's restructuring aligns with that framework. Rather than responding to revenue pressure, the company appears to be recalibrating around what management sees as a new production function. If AI increases output per employee, companies face a capital allocation decision: scale headcount in parallel or improve efficiency and margins. Block's move suggests a shift toward operating leverage. Dorsey wrote that conducting repeated rounds of layoffs would have been more disruptive than taking a single action to reset the organization's structure. The company emphasized that its core businesses, including Square and Cash App, remain financially solid. Layoffs tied to AI inevitably trigger fears of a broader employment crisis. But current labor research presents a more complex picture. The World Economic Forum wrote on Friday (Feb. 27) that while automation and AI will displace certain tasks, they will also create new categories of work, particularly in data, AI oversight, cybersecurity and human-centric services. The report emphasizes transition rather than permanent contraction. A significant portion of workers' skills are expected to evolve over the next five years, requiring retraining and adaptation. The pressure is real, but it is directional. Roles centered on routine information processing are most exposed. Roles combining domain expertise, judgment and technological fluency are expanding. This pattern mirrors earlier computing cycles. The introduction of personal computers reduced demand for some clerical roles but fueled growth in IT services, software development and digital marketing. The internet reshaped retail and media but created entire new sectors in eCommerce and cloud infrastructure. AI appears to be accelerating that restructuring, particularly in industries like FinTech, where large portions of work involve data, transactions and risk analysis. Fraud detection, customer support triage and onboarding reviews are increasingly augmented by machine learning systems. As these systems improve, organizations adjust their staffing models. PYMNTS CEO Karen Webster has argued that 2026 marks the year AI adoption moves from experimentation to operational reality. Instead of pilot projects and chat interfaces, companies are embedding AI into payments flows, customer engagement systems and enterprise software stacks. Once intelligence is part of the infrastructure, it reshapes the organization itself. Block operates squarely in that environment. Payments processing, merchant services and peer-to-peer finance are data-heavy domains where AI can meaningfully reduce friction and manual effort.

Jack Dorsey Says AI Models' Progress, Push Toward Functionalization Spurred Block's Mega Job Cuts - Stock Surges 23% After-Hours - Block (NYSE:XYZ)

Block, Inc. (NYSE:XYZ) CEO Jack Dorsey said Thursday that advancements in artificial intelligence models and efforts to streamline operations drove the company's choice to lay off nearly half its workforce. Push Toward 'Functionalization During the company's fourth-quarter earnings call, Dorsey was probed about the timing and rationale behind the neary 40% workforce reduction. "We have been working very hard to functionalize the company. That's a big part of what gives us more confidence in making this move," he responded. Dorsey said that Block effectively houses two separate companies -- likely referring to Square and Cash App -- with independent corporate structures, but with a lot of "duplication." "As we functionalized, it allowed us to act more like one company and recognize where there are common capabilities and common foundation, and we're still doing a lot of that work, but I have the confidence that we're in a place that we can move much faster there," the top executive said. AI Opened Up New Possibilities, Says Dorsey Dorsey further pointed out that AI models became "an order of magnitude" more capable and intelligent. This breakthrough, he said, has opened up new possibilities for applying AI to most of the organization, enabling accelerated product delivery. Block Fires 4,000 Employees In 'Hardest Decision' The justification comes after Block reduced its headcount by nearly half, from over 10,000 people to just under 6,000. Dorsey described the decision as one of the "hardest" in the company's history. The affected employees would receive 20+ weeks of salary, vested equity, six months of health coverage and $5,000 transition cash. In other news, Block reported earnings of 65 cents per share for the fourth quarter, in line with the Street estimate, while revenue missed expectations. Price Action: Block shares surged 23.52% in after-hours trading after closing 4.99% higher at $54.53 during Thursday's regular trading session, according to data from Benzinga Pro. Year-to-date, the stock has tumbled 16.22%. The stock exhibited weaker price trends in short, medium, and long terms, though its Growth score remained high, according to Benzinga's Edge Rankings. Photo Courtesy: Frederic Legrand - COMEO on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Jack Dorsey Recasts Block as an A.I.-First Company

Jack Dorsey says most companies will soon follow Block's lead, restructuring around A.I.-powered productivity and flatter teams. In December, Jack Dorsey reached a blunt conclusion: A.I. was advancing too quickly to remain a side project at his fintech company, Block -- it had to be at the center of it. Yesterday (Feb. 26), Dorsey unveiled what he called "one of the hardest decisions in the history of our company": Block will cut roughly 40 percent of its workforce, reducing headcount from about 10,000 employees to 6,000. The move, he said, reflects how A.I.-powered productivity is changing the economics of running a company. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Block, the parent company of Square and Cash App, has expanded rapidly in recent years. At the end of 2019, it employed fewer than 4,000 people. But Dorsey was clear that the layoffs are not about financial distress or overhiring. "We're not making this decision because we're in trouble," he said. "Something has changed. 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." Financially, Block appears healthy. The company yesterday reported better-than-expected revenue for the final quarter of 2025, with gross profit rising 24 percent year over year to $2.87 billion. Cash App's monthly active users jumped by 10 million from the previous quarter to 59 million. Employees affected by the layoffs will receive 20 weeks of salary, six months of health coverage and an additional $5,000. Inside Block, A.I. is already woven into daily work. Goose, the company's internal A.I. agent, began as a coding assistant and now saves engineers eight to ten hours a week. It has since spread to nontechnical teams for software and workflow tasks. As of last September, Goose was on track to save 25 percent of employee time in 2025 across the company. The technology is also becoming central to Block's products. Square now offers Square AI, a conversational assistant for merchants, along with ManagerBot, which automates tasks like inventory ordering and budgeting. Cash App users can tap into MoneyBot, a personalized assistant designed to answer financial questions and track spending and savings. Dorsey's ambitions go further. Beyond embedding A.I. directly into its services, Block ultimately wants customers to build their own A.I. tools on top of its platform. "I intend that we win in this space, and that we grow and bring this intelligence to both sellers and to individuals," he said during the earnings call, adding that the company's real-time consumer data is its "biggest advantage" in anticipating users' A.I. needs. For Dorsey, the debate isn't whether A.I. will reshape corporate structures, but how quickly leaders are willing to adapt. "I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now," he said in announcing the layoffs. To avoid repeated rounds of cuts and prolonged uncertainty, he chose the latter. Block may be the most dramatic example yet of A.I. reducing the need for human staff, but it is hardly alone. In recent months, Silicon Valley has seen a wave of A.I.-linked layoffs and restructuring plans from companies including Salesforce, Microsoft, Duolingo and Amazon -- particularly in roles tied to coding and software development. If anything, Block is not early but late, Dorsey said. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he told analysts yesterday. "I'd rather get there honestly and on our own terms than be forced into it reactively."

Block Slashes Staff and Eyes AI as Primary Banking Actives Jump 22% to 9.3M | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. As the company culls its workforce from more than 10,000 employees to just under 6,000, Block also used the call to point to accelerating growth in its banking ecosystem, in terms of active users, transactions and Cash App at the center of that ecosystem. Investors cheered the news, sending the stock up 24% in after-hours trading on Thursday. Chief Executive Officer Jack Dorsey framed the move as structural and strategic. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," he said on the earnings call, adding, "I don't think we're early to this realization. I think that most companies are late." He added that "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 single week." He stated on the call that the company is moving toward an operating model in which intelligence is embedded across product development, risk management and customer interfaces. "Intelligence will be at the core of how the entire company works," Dorsey said. Dorsey said Block has already seen internal gains in productivity. "We've seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time," he told analysts, pointing to agentic coding tools and improvements in model capabilities. Chief Financial Officer Amrita Ahuja reinforced that message, noting that developer velocity has increased more than 40% since September as AI tools have been adopted across engineering teams. Externally, the intelligence strategy is showing up in Square AI, MoneyBot within Cash App, and what management calls "manager bot" for sellers. In Cash App, more than 70% of actives who used MoneyBot in testing selected a proactive prompt about their finances to get started, according to the shareholder letter that accompanied results. The stated goal is to move from reactive interfaces to proactive intelligence that anticipates user needs across payments, lending and commerce. The restructuring announcement arrived alongside a quarter that exceeded guidance. Block generated $2.87 billion in gross profit in the fourth quarter, up 24% year over year. Adjusted operating income rose 46% to $588 million. Cash App remained the primary growth engine. Monthly transacting actives reached 59 million. Primary Banking Actives, which represent customers who receive direct deposit or meet minimum spending thresholds, grew 22% year over year to 9.3 million in December, up from 8.3 million in September. Management has emphasized that these customers generate nearly 10 times the gross profit of peer-to-peer-only users. Consumer lending expanded sharply. Cash App consumer lending origination volume rose 69% year over year to $18.5 billion in the quarter. Commerce Enablement volume within Cash App reached $54.7 billion, up 17%, while inflows per transacting active increased 12% year over year to $1,410. Square, while growing at a slower pace, showed steady momentum. Gross payment volume increased 10% year over year to $65 billion. Food and beverage sellers were a bright spot, with GPV in that vertical up 16% year over year. Management continues to position Cash App as a banking alternative for what it calls "modern earners." The company estimates an addressable market of approximately 125 million people across independent earners, hourly workers and teens, per the company's letter. Primary banking growth is central to that strategy. Ahuja said the company expects to compound gains in its banking ecosystem while scaling Cash App Green, its status program tailored to customers with multiple income streams. The lending engine, built on what Block calls Cash App Score, integrates repayment history with near real-time inflow and spending data to support underwriting decisions. Management raised its 2026 outlook. Block now expects gross profit of $12.2 billion, reflecting 18% year over year growth. Ahuja said adjusted operating income margins are expected to expand each quarter through the year, with just under 60% of the full-year adjusted operating income forecast to be delivered in the second half. "We're in a place where a lot of what we've been working on is coming together," Dorsey said, adding that he wants Block to be "ahead of the market" in applying intelligence across financial services.

Jack Dorsey sounds layoff alarm after Block slashes 50% staff -- which companies could be next?

Tech layoffs 2026: For thousands of white-collar workers, the future suddenly feels less certain. Jack Dorsey announced that Block, the parent company of Square and Cash App, will cut nearly half of its workforce, reducing its headcount from more than 10,000 employees to just under 6,000. That means more than 4,000 people are losing their jobs, even as Dorsey says the business itself is strong and profits are growing. In a post on X, Dorsey explained that he chose one sweeping round of layoffs rather than multiple smaller cuts over time. Repeated layoffs, he wrote, are "destructive to morale," focus, and trust among customers and shareholders. Instead of stretching the uncertainty over months or years, he said he would rather take "a hard, clear action now" and rebuild from there. The severance packages are described as relatively generous. Affected employees will receive 20 weeks of base pay, plus an additional week for each year they worked at the company, as per a Business Insider report. Their equity will continue vesting through the end of May, they will receive six months of health coverage, be allowed to keep their corporate devices, and get a $5,000 payment. The scale of the cuts stands out in an industry that has often relied on repeated rounds of layoffs. Management experts say those staggered reductions can create "layoff fatigue and chronic anxiety," hurting morale and productivity, as per the Business Insider report. Dorsey framed the decision as part of a broader shift driven by artificial intelligence. He said intelligence tools, combined with smaller and flatter teams, are enabling "a new way of working" that changes what it means to build and run a company. On Block's earnings call, he predicted that within the next year, most companies will reach the same conclusion and make similar structural changes. The announcement comes at a time when fears about AI and white-collar job losses are already rising. A recent scenario from Citrini Research warned that AI could sharply increase unemployment, unsettling investors and circulating widely on social media. Though described as a scenario rather than a prediction, it gained renewed attention after Block's layoffs. Other tech leaders have voiced similar concerns. Dario Amodei has warned of a looming white-collar "bloodbath," and Mark Zuckerberg has said AI is reshaping what individual employees can accomplish. At Klarna, CEO Sebastian Siemiatkowski said the company's workforce has already halved and is expected to shrink further by 2030. Other companies, including Pinterest, CrowdStrike, Chegg, Salesforce, and Ford Motor Company, have also linked layoffs or workforce changes to AI-driven efficiency. Not everyone agrees that AI alone is to blame. Some observers argue that companies may have overhired during boom times and are now adjusting. Also read: Employee leaves stable Big Four job for startup, regrets it after 3 months -- what people told him Policymakers are paying attention. Federal Reserve Chair Jerome Powell said many companies mention AI when announcing hiring freezes or layoffs, though those effects are not yet clearly visible in jobless claims data, as per a USA Today report. The longer-term outlook remains uncertain. The World Economic Forum estimates that 92 million jobs could be displaced by 2030, but also projects that 170 million new roles could be created in the same period. How many jobs is Block cutting? More than 4,000 roles are being eliminated, reducing the workforce to under 6,000 employees. Are other tech leaders worried about AI and jobs? Yes. Several executives have publicly warned about AI reshaping the workforce.

Block shares spike 20% after Jack Dorsey orders sweeping layoffs to...

Financial tech firm Block's stock surged as much as 20% in Friday trading after its billionaire CEO Jack Dorsey revealed plans for sweeping layoffs and a full embrace of AI tools. Dorsey, best known as the co-founder of Twitter, said Block would lay off about 40% of its employees - or more than 4,000 of its 10,000-plus workforce. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Dorsey wrote in a letter to shareholders. "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." The 49-year-old executive, whose net worth is pegged by Forbes at $5.9 billion, also predicted that more firms will follow in Block's footsteps. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively," Dorsey wrote. By the afternoon, Block shares were hovering up about 15% to $62.62 per share. Even with the gains, the stock is down about 4% since the start of the year. The layoffs were announced alongside Block's fourth-quarter earnings. The payments firm's gross profit jumped to $2.87 billion, up 24% compared to the same quarter a year ago. "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," Stephen Innes of SPI Asset Management wrote in a note. "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not," he added. Block's announcement could further inflame concerns that AI advancements will cause major upheaval in the job market. Earlier this week, a major selloff of tech stocks was fueled in part by a bombshell essay by Citrini Research, which speculated about a nightmare future scenario in which AI caused unemployment to spike above 10%, leading to a wave of mortgage and loan defaults. Amazon has been laying off thousands of employees, linking the cuts to AI adoption. Last year, Salesforce laid off 4,000 workers, also attributing the move to AI.

Catastrophic AI warning as another tech giant slashes over 4000 jobs

Another major tech giant is axing thousands of jobs as it goes all in on artificial intelligence just one day after an Australian software company made the same move. Digital payments company Block, which is led by Twitter founder Jack Dorsey and is listed on the ASX, shared its plans to drastically restructure its operations using AI tools despite posting impressive results. Mr Dorsey shared a letter to investors confirming the company is reducing Block by almost half from over 10,000 workers to just under 6000. "Which means that over 4,000 people are being asked to leave or entering into consultation," he said. "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 we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week." Mr Dorsey said Block was not early to the company's realisation, rather "most companies are late". "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he said. "I'd rather get there honestly and on our own terms than be forced into it reactively." Block also revealed its profit grew to US$2.87b in the final three months of 2025 while net income fell 55 per cent to US$1.3b. The digital payments company's share price has boomed off the back of this announcement, jumping almost 30 per cent on Friday. Block owns a litany of payment technology giants including Afterpay, CashApp and Square. It follows Australian tech giant WiseTech on Wednesday revealing plans to sack 2000 of its 7000 staff. WiseTech told investors the tech company is venturing on with the next phase of its AI-driven "efficiency program" and expects to slash up to 50 per cent of its staff in some areas. The company's CEO Zubin Appoo said massive shifts were coming to the sector that will radically alter what the workforce looks like. "Software development has experienced its most significant shift in decades," Mr Appoo said. "I am prepared to say this clearly: the era of manually writing code as the core act of engineering is over. "AI amplifies the productivity of our expertise in logistics and trade, the rich datasets that WiseTech holds, and the network advantage that we have built over 30 years." These sackings will impact almost 30 per cent of WiseTech's workforce and staffers will not be repurposed elsewhere in the company as there will not be a role for them. Other major companies are also looking at AI, with some looking to cut roles and others trying to retain them. Commonwealth Bank of Australia wants to embrace AI to bolster productivity while retraining staff for the burgeoning technology. However, US e-commerce giant Amazon sacked 14,000 workers in October and revealed plans to axe another 16,000 in January.

Jack Dorsey's Block Stock Soars 20% After 4,000 Job Cuts & AI Pivot

Jack Dorsey's Block said it plans to cut about 4,000 jobs, reducing its workforce by nearly half, as the company restructures around artificial intelligence and smaller teams. The announcement came with its latest earnings update and triggered a sharp after-hours stock move. Block shares rose more than 20% in extended trading after the company disclosed the cuts and outlined its strategy. Block described the layoffs as a strategic decision tied to productivity and execution. Chief Executive Officer said the company wants to operate with smaller teams and apply AI across more parts of the business. He said Block chose to make the changes in one step rather than through repeated rounds of cuts. Dorsey also said AI capabilities improved faster than expected in recent months. He told analysts that newer models created a clearer path for using AI in nearly every part of Block's operations. The company has invested in internal , including Goose, to improve efficiency and reduce manual work. Block positioned the restructuring as a proactive move rather than a response to immediate financial stress. The company said it is changing its structure while its core businesses continue to grow. That message formed a key part of the company's explanation to investors and employees. Block also detailed support for employees affected by the layoffs. US employees will receive severance pay, six months of healthcare coverage, equity vesting through the end of May, corporate devices, and a US$5,000 transition payment. The company said employees outside the United States will receive similar support based on local policies.

Fintech company Block lays off 4,000 of its 10,000 staff, citing gains from AI

BANGKOK (AP) -- Shares in the financial technology company Block soared more than 20 per cent in premarket trading Friday after its CEO announced it was laying off more than 4,000 of its 10,000 plus employees, reconfiguring to capitalize on its use of artificial intelligence. "The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to online payment platforms such as Square and Cash App. "A significantly smaller team, using the tools we're building, can do more and do it better," he said. Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. The assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24 per cent from a year earlier. "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," Stephen Innes of SPI Asset Management said in a commentary. "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not," he said. A global technology company founded in 2009, San Francisco-based Block operates in the United States, Canada, parts of Europe, Australia and Japan. In a post on Twitter, Dorsey outlined various ways the company will support those laid off. For employees overseas, the terms might differ, he said. It was unclear which employees would be laid off where. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months. A number of other high-profile companies have announced layoffs recently, including UPS, Amazon, Dow and the Washington Post.

Jack Dorsey Cut Half of Block's Workforce and Wall Street Threw a Party

Jack Dorsey cut 4,000 jobs -- and lit the fuse on a chain reaction that will reshape how every company in America thinks about its workforce. Jack Dorsey just laid off half his company in a single post. Four thousand people gone. Not because Block is struggling, quite the opposite. Fourth-quarter gross profit jumped 24 percent year over year to $2.87 billion. Cash App surged 33 percent. Earnings beat estimates. The company raised its full-year 2026 guidance to $12.2 billion in gross profit. Block is firing on all cylinders and it just told half its workforce they're no longer needed. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters The reason, stated without corporate euphemism, is artificial intelligence. "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," Dorsey wrote. "And that's accelerating rapidly." The stock surged more than 24 percent in after-hours trading. Four thousand careers ended, and investors added billions to Block's valuation in hours. If that doesn't stop you cold, you're not paying close enough attention. The first domino Companies have been invoking A.I. as justification for layoffs for two years. Look at Pinterest, CrowdStrike, Chegg, Salesforce, Amazon. In most cases, A.I. was a convenient narrative dressing up post-pandemic headcount corrections. Block is different. This is probably the first legitimate mass layoff driven by A.I. as the actual operating thesis. Dorsey said explicitly that this isn't happening because Block is in trouble. It's happening because he believes a smaller team, augmented by intelligence tools, can do more and do it better. He pointed to a step-change in model capabilities in December 2025 that surpassed even Block's own internal tool, Goose. "Something happened in December last year where the models just got an order of magnitude more capable," he said. Dorsey was explicit about why he chose a single massive reduction rather than a slow bleed. Repeated rounds of cuts, he argued, destroy morale, erode trust and leave companies in permanent organizational anxiety. He'd rather absorb the shock once, reset and rebuild. The severance is generous, with 20 weeks of base salary plus tenure bonuses, equity vested through May, six months of healthcare and an additional $5,000. But generosity in severance doesn't change the underlying reality. This is a CEO telling the world that A.I. made 4,000 knowledge workers unnecessary. Not inefficient. Unnecessary. And the market agreed. When layoffs correct past hiring mistakes, they're cyclical. They pass. When layoffs reflect a structural redefinition of how work gets done, they're permanent. And they spread. Here's what most analysts are missing. The real signal isn't that Block deployed A.I. and realized it could save money, it's that Block needed 10,000-plus people to do what it was doing in the first place. A.I. gave Dorsey cover to fix a structural problem that predates A.I. entirely. Block employed fewer than 4,000 people at the end of 2019. It ballooned past 10,000 during the pandemic hiring frenzy, adding layers of management and coordination overhead that slowed execution. Companies with strong operational design were already lean. They don't face this choice the same way. The ones in danger are organizations that grew bloated, confused hiring with progress and now carry thousands of roles that exist primarily to coordinate other roles. A.I. didn't create the bloat. But it just made the bloat indefensible. The market reaction is the most dangerous part Block's stock jumped 25 percent after the announcement. That market reaction should concern everyone far more than the layoffs themselves. We've just established a clear, public incentive: fire your people, replace them with A.I. and the market will reward you handsomely. Every CEO in America saw that number Thursday night. Every board member. Every activist investor. Consider the chain reaction. Board members and investors will now demand other technology companies follow suit. No CEO wants to be the one who kept 10,000 employees when the market celebrated companies that kept 6,000. When one company lays off and gets rewarded, it becomes hard for others not to follow. And, when dozens of companies cut simultaneously, driven not by financial distress but by investor pressure, the labor market faces a fundamentally different kind of stress. Recruitment pipelines weren't built for synchronized workforce reduction. Benefits systems weren't designed for it. Some analysts are already circulating the term "self-organized criticality" which is the phenomenon where a single event triggers cascading, system-wide change. Block may be that event. If you're saying, "This won't happen to me," re-evaluate your thought process immediately. It may be the most important thing you do this year. Dorsey didn't just describe what Block is doing; he issued a prediction that "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively." He's telling you, plainly, that your company is next. Whether your CEO acts proactively like Dorsey or gets dragged into it by shareholders who saw Block's stock chart, the destination is the same. The only variable is whether it happens on your terms or theirs. If you work in an office and you haven't made yourself A.I.-native, and if you don't understand how to orchestrate agents, automate workflows and use intelligence tools as force multipliers, then you should be operating under the assumption that your role is at risk within the next 12 months. It's the logical conclusion of what the market just told us it values. Where is the abundance? For years, we've been told A.I. would create abundance and that new categories of work would replace old ones. That the net effect on employment would be positive, just as it was with previous technological revolutions. Where are those jobs? Block just cut 4,000 roles and got rewarded with a stock surge. U.S. companies announced 108,435 layoffs in January 2026 alone, which is up 118 percent from a year earlier. In 2025, companies directly attributed 55,000 job cuts to A.I., twelve times the number from two years prior. New jobs aren't materializing at the pace that displaced workers need. And the skills gap between what's being eliminated in the middle-management coordination, routine analysis, first-draft content creation and what's demanded by A.I. orchestration, system design, agent management is enormous. The transition isn't seamless or gradual, and no one is managing the affected through it. The people who will thrive are building and starting companies and creating products. They're using A.I. to generate value rather than waiting for a corporation to define their role. The entrepreneurial game has never been stronger because depending on a large organization to guarantee your employment just got dramatically less reliable. The clock has rung Block's decision will be studied in business schools for decades. It will be cited as either the moment corporate America woke up to the A.I. reality or the moment it sleepwalked into a workforce crisis. Probably both. Dorsey described Block's future as an "intelligence-native company" with A.I. not layered on top of existing processes but embedded in the foundation. We need A.I. proficiency integrated into every professional curriculum. We must immediately create workforce transition infrastructure that treats this as permanent, and we need to open an honest public dialogue about what this means for the social contract between employers and employees. The comfortable fiction that A.I. will only eliminate jobs nobody wanted is crumbling in real time. Block didn't cut administrative assistants. It cut engineers, product managers, analysts and operational staff across the entire organization. The breadth tells us that intelligence tools are reaching into every layer of the knowledge-work stack. Jack Dorsey is one of the most consequential entrepreneurs of his generation. When someone with that track record says A.I. is about to reshape every company in America, and then proves he means it by cutting his own organization in half, the prudent response is to take him at his word. "I don't think we're early to this realization," he said. "I think most companies are late." Block isn't getting ahead of the curve, it is the curve. And the rest of corporate America just got put on notice. The question is no longer whether your company will be restructured around intelligence tools. It's whether you'll do it on your terms or at the mercy of a market that just showed you exactly what it values. Expect much more of this. Prepare accordingly.

Jack Dorsey fires 4,000 from Block, but shares jump 20%. Does the stock market prefer AI over humans?

Shares of Block jumped over 20% after Jack Dorsey announced strong Q4 profits and plans to cut 4,000 jobs, citing rising AI-driven efficiency. Markets rewarded the structural cost reset, highlighting how investors increasingly favour productivity gains from artificial intelligence over workforce size, despite concerns around social and organisational impact. The parent of Square and Cash App's fourth-quarter gross profit rose 24% year-on-year, reflecting strong demand for its payments products and services. Block expects to incur about $450 million to $500 million in restructuring charges tied to the layoffs. In a letter to shareholders, Chief Executive Jack Dorsey said intelligence tools have changed what it means to build and run a company, adding that a significantly smaller team, using the tools we're building, can do more and do it better. He argued that most companies are late in recognising how AI can reshape operating models. The reaction in the stock market raises a broader question about whether the market does not care about the human cost. Historically, markets are not designed to price social impact directly. Stock prices usually reflect the expected future earnings and cash flows predictability. If investors believe job cuts will structurally lower costs, lift margins and accelerate productivity, especially when paired with strong revenue or profit growth, they typically reward the stock. This is exactly what happened in this case. Investors saw many positives in the announcement that shook the tech world and beyond. First, gross profit growth of high double-digits suggested the core payments business remained resilient. Further, Dorsey signalled that layoffs are a structural cost reset, not a temporary trimming. And finally, the tech world and with it investors are slowly coming to terms that a pivot to AI is inevitable, and the costs, whether it be humans or otherwise, will be there. Dorsey's unusually direct attribution of layoffs to AI may also have sharpened the narrative. Stephen Innes of SPI Asset Management, while speaking to Reuters, described the move as a "public case study" of a CEO stating that intelligence tools have altered what it means to run a company. While many firms have announced layoffs in recent months, few have so openly connected them to AI-driven productivity gains. Also read: Global funds make $2.1 billion comeback on D-Street as earnings outlook improves For investors, cost-cutting is often viewed through the lens of operating leverage. If a company can maintain or grow revenue with a smaller workforce, margins expand. Higher margins increase earnings per share, even after accounting for one-time restructuring charges. In discounted cash flow terms, that improves the present value of future profits. There is also a broader macro narrative at play. Markets are increasingly pricing in a world where AI enhances productivity across sectors. Companies that proactively restructure around AI are often perceived as better positioned than those that delay. That does not mean social consequences are irrelevant. Layoffs can dampen morale, reduce institutional knowledge and carry reputational risk. Over time, if productivity gains fail to materialise or innovation suffers, the market can reverse its view. But in the short term, especially during earnings season, stronger profit growth combined with credible cost discipline tends to dominate investor thinking. Also read: Doomsday or deep value: India's IT stocks at crossroads after 20% crash Block, founded in 2009 and headquartered in San Francisco, operates across the United States, Canada, parts of Europe, Australia and Japan. The company said it will provide support to affected employees, though details vary by geography. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Jack Dorsey's Block to slash 4,000 jobs -- nearly half of...

Block on Thursday said it will cut over 4,000 jobs -- nearly half its workforce -- as part of an overhaul to embed artificial intelligence across its operations, sending shares of the payments firm up 25% in after-hours trading. The layoffs signal how the AI boom is translating from hype into workforce changes, fueling long-held concerns among workers and economists that the technology could eliminate roles even as it boosts productivity and profits. "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," CEO Jack Dorsey said in a statement. "I don't think we're early to this realization. I think most companies are late," he added. In a post on social media platform X, Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. He said a smaller company would also give it space to grow the business the right way, instead of constantly reacting to market pressures. Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale at which the technology is starting to translate into lower expenses and higher margins in some industries. The layoffs represent "a seminal moment" in the AI era, offering a glimpse into how the technology may fundamentally reshape the corporate world, analysts at Evercore ISI wrote in a note. The company said it expects to incur roughly $450 million to $500 million in restructuring charges. Dorsey said he expects a majority of companies to reach the same conclusion Block did and make similar structural changes. "I'd rather get there honestly and on our own terms than be forced into it reactively." Analysts at Truist said the stock was likely surging on hopes of better-than-expected 2026 margins as a result of the workforce reduction. Block posted an adjusted profit of 65 cents per share in the three months ended December 31, compared with 47 cents a year earlier. Gross profit grew 24% in the quarter, driven by a 33% surge in the Cash App business, which enables peer-to-peer mobile payments. Block said it believes it can sustain Cash App's strong gross profit growth and continue accelerating Square's gross payment volume over the next three years. For the first quarter, Block forecast gross profit would rise 22% from a year earlier to $2.80 billion. It also slightly raised its 2026 gross profit growth forecast to 18% from a preliminary view of 17%, while saying it continues to take a "prudent approach" towards both its quarterly and full-year outlook. The results come as consumer spending remains resilient despite elevated interest rates, sustaining transaction volumes across the payments sector. The results cap a broadly upbeat holiday-quarter reporting season for the payments sector, with Visa and Mastercard also posting solid results.

Block shares surge 25% as ex-Twitter CEO Jack Dorsey lays off 4,000 employees due to AI; here's why

Block Inc. is reducing its workforce by 4,000 employees. CEO Jack Dorsey believes artificial intelligence tools will enable a smaller team to perform better. This strategic move aims to make Block a more valuable, intelligence-native company. The company's financial fundamentals remain strong, with gross profit and customer base expanding. This decision is proactive, anticipating broader industry shifts driven by AI. Shares of Block Inc. surged around 25% in after-hours trading after CEO Jack Dorsey on Thursday announced that the company will lay off 4,000 employees, saying a smaller team equipped with artificial intelligence tools can "do more and do it better". Dorsey, formerly the CEO of Twitter (now renamed X by Elon Musk), said in a letter to shareholders that these intelligence tools have changed what it means to build and run a company, with their capabilities compounding faster every week. "I don't think we're early to this realization. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively," he said. Dorsey said the move is not just about efficiency, noting that Block serves millions of customers who will also experience the economic effects of the same technological shift. Intelligence will be at the core of how the entire company operates going forward, he said, adding that it will shape how teams make decisions, build trust, manage risk, develop products and serve customers. "We believe Block will be significantly more valuable as a smaller, faster, intelligence-native company. Everything we do from here is in service of that," he said. The executive, however, said the decision was not driven by business weakness, noting that the company's fundamentals remain strong, with gross profit rising, its customer base expanding and profitability improving. He added that the company could have reduced its workforce gradually over months or years but wanted to avoid repeated rounds of layoffs, which he described as "destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead". "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. A smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures," he added. The announcement came as Block reported a 24% year-on-year (YoY) rise in gross profit to $2.87 billion and a 20% adjusted operating income margin in Q4 FY25. "We are now expecting gross profit growth of 18% year over year for 2026 and adjusted operating income of $3.20 billion, or a 26% margin," the company said. The AI-driven layoffs come amid broader concerns about disruption in the tech sector, which has weighed on software stocks globally. Back home, IT stocks have fallen by as much as 20% on Dalal Street so far this month. (With inputs from agencies) (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Dorsey's blunt AI warning sharpens debate over jobs and profits

Feb 27 (Reuters) - Jack Dorsey is not the first chief executive to say artificial intelligence will transform work. He may be among the first to act as if it already has - and to say so openly. "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," Block CEO and co-founder said in a statement on Thursday. "I don't think we're early to this realization. I think most companies are late," he added as he laid out plans to cut over 4,000 jobs, nearly half the company's workforce, as part of an overhaul to embed AI across the fintech's operations. Block shares rose sharply on Friday, underscoring how markets are increasingly rewarding companies that present AI not as an experiment but as a driver of structural change. Dorsey also delivered a blunt warning to peers: most companies are behind the AI curve and will reach the same conclusion within a year. "I'd rather get there honestly and on our own terms than be forced into it reactively." Until now, most executives have resisted those kinds of sweeping conclusions even as their firms pour billions into the technology. The comments are likely to sharpen a growing debate among executives, economists, investors and policymakers: is AI primarily a tool that helps workers do more - or one that enables companies to do the same with far fewer people? According to a Reuters tally, companies have announced more than 61,000 job cuts tied to AI, including Amazon, Pinterest and Australia's Wisetech since November. But Block is among the highest-profile companies to cite AI explicitly as the primary driver of its reductions, rather than a secondary efficiency gain. Some investors argue that automation-related cuts are partly correcting for years of overhiring. "AI is the new scapegoat," said Brian Jacobsen, chief economic strategist at Annex Wealth Management, on Friday. Still, markets are increasingly uneasy about AI's potential to upend jobs and profits amid an uncertain global economic backdrop. A widely circulated report this week by Citrini Research outlined a 2028 scenario in which unemployment rises to 10.2%, driven by rapid displacement of workers in software, logistics and delivery roles. BUSINESSES HAVE BEEN MORE GUARDED Evidence is emerging that firms are beginning to see returns on their investment. Morgan Stanley analysts said this week there has been a steady rise in the number of companies reporting quantifiable benefits from AI adoption, based on an analysis of more than 10,000 earnings calls and fourth-quarter conference transcripts. Some 21% of S&P 500 companies mentioned at least one measurable benefit, up from 15% in the third quarter and 10% in the final quarter of 2024. Greater AI use will boost companies' profit margins by 40 basis points this year, they estimate. But until now, most executives and policymakers have been more guarded than Dorsey when talking about AI and jobs. "What we are seeing for the moment is that it's increasing productivity," ECB President Christine Lagarde told a committee of the European Parliament on Thursday. "But we are not yet seeing consequences in terms of labour market and waves of redundancies that are feared, and that you know we will be extremely attentive going forward." At the World Economic Forum last month, JPMorgan Chase CEO Jamie Dimon said jobs would disappear but new ones would emerge. On Friday, Bank of America global economists Claudio Irigoyen and Antonio Gabriel said AI could ultimately affect a quarter of all jobs. AI shock, they said, will be disruptive for companies that do not survive and for workers who are displaced, but the economy will be better off because it will create new jobs and business opportunities that were previously prohibitive. Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors, warned of unintended consequences from drastic steps like Block's. "Dorsey's strategy suggests that less is more and that human capital has lost its competitive edge," he said. "The question is whether the company is resetting to its smaller, nimbler startup days or whether it might lose the creativity and human intuition that built its most iconic products in the first place." (Reporting by Utkarsh Shetti and Manya Saini in Bengaluru, Romolo Tosiani and Philippe Leroy Beaulieu in Gdansk and Francesco Canepa in Frankfurt;Writing by Josephine MasonEditing by Louise Heavens) By Utkarsh Shetti, Manya Saini and Romolo Tosiani

Jack Dorsey's Block to cut over 4,000 jobs as AI use expands, shares surge

Feb 26 (Reuters) - Block on Thursday said it will cut over 4,000 jobs, or nearly half its workforce, as advances in AI reshape how it builds and runs its business, sending its shares up 22% in after-hours trading. The layoffs underscore how the AI boom is translating from hype into workforce changes, fueling long-held concerns among workers and economists that the technology could eliminate roles even as it boosts productivity and profits. "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," CEO Jack Dorsey said in a statement. "I don't think we're early to this realization. I think most companies are late," he added. In a post on social media platform X, Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. He said a smaller company would also give it space to grow the business the right way, instead of constantly reacting to market pressures. Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale at which the technology is starting to translate into lower expenses and higher margins in some industries. The company said it expects to incur roughly $450 million to $500 million in restructuring charges. Block posted an adjusted profit of 65 cents per share in the three months ended December 31, compared with 47 cents a year earlier. Gross profit grew 24% in the quarter, driven by a 33% surge in the Cash App business, which enables peer-to-peer mobile payments. (Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid)

AI doomsday fear coming true? Jack Dorsey-led Block lays off nearly half of its staff, Twitter co-founder says 'most companies late'

Jack Dorsey-led Block has cut over 4,000 jobs, or nearly half its workforce, amid an AI boom. The Twitter co-founder said most companies are late and also said that they are not making the decision because they're in trouble. The job cuts come at a time when a new article offering an apocalyptic vision of humanity's future with artificial intelligence has gone viral and caused stock prices to tumble in major tech and financial firms. Block, led by CEO Jack Dorsey has announced the most dramatic layoffs in recent times as the company has slashed around 40% jobs which is nearly half of its workforce in a single round of layoffs. From 10,000, the company's workforce has come down to 6,000. "Repeated rounds of layoffs are destructive to morale, focus, and to the trust of customers and shareholders. 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," Jack Dorsey wrote in a post on X. According to a letter to shareholders by co-founder Jack Dorsey, "intelligence tools" remain the key reason behind the layoffs. Dorsey thinks most companies will follow suit in the near future. "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," Dorsey wrote. The job cuts at Block, the company behind Square, Cash App and Afterpay, come as AI has reshaped jobs across the tech sector and is raising concerns about the future of the job market. Companies like Amazon, Meta, Microsoft and Verizon have all made sweeping cuts in the last year tangentially related to AI. Over the past week, a highly speculative financial essay has captured attention on Wall Street. Titled "The 2028 Global Intelligence Crisis," the viral piece by Citrini Research and Alap Shah imagines a dramatic economic collapse triggered by artificial intelligence. ALSO READ: Rinku Singh's father, a LPG cylinder delivery man, used to beat him for playing cricket. But one incident changed everything Written as a "macro memo from June 2028," the essay describes a future where the S&P 500 has fallen 38%, unemployment has surged to 10.2%, and the U.S. economy has slipped into a deflationary spiral. According to the scenario, widespread AI-driven automation leads to massive displacement of white-collar workers, shaking markets and destabilizing the broader economy. The paper explores a hypothetical doomsday scenario where rapid AI automation triggers mass unemployment and financial instability by 2028. It specifically warns that Indian IT giants like TCS, Infosys, and Wipro are at risk, as their business models face potential destruction from AI-driven automation. "The entire model was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity," the report stated, adding that as services exports weaken, the rupee falls significantly against the dollar within four months. "AI got better and cheaper. Companies laid off workers, then used the savings to buy more AI capability, which let them lay off more workers. Displaced workers spent less," it said. "Companies that sell things to consumers sold fewer of them, weakened, and invested more in AI to protect margins. AI got better and cheaper. A feedback loop with no natural brake." "NVDA was still posting record revenues. TSM was still running at 95 per cent plus utilisation. The hyperscalers were still spending $150-200 billion per quarter on data centre capex. Economies that were purely convex to this trend, like Taiwan and Korea, outperformed massively." ALSO READ: 'Karma is real': Elon Musk's cryptic message to Bill Gates after X post on Tesla short sellers goes viral The co-founder of Twitter believes he's ahead of the game. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively," he wrote. Most companies have attributed AI as the reason for the massive job cuts. The companies had rapidly expanded during the pandemic when demand for online services were at an all-time high. For instance, Block, Inc. grew from 3,835 employees at the end of 2019 to more than 10,000 before announcing its latest layoffs. Meta also nearly doubled its workforce within about two years during that period. ALSO READ: Nvidia CEO makes big remark on AI threat, Jensen Huang claims 'I think the markets got it...' These job cuts come as concerns grow over AI's impact on the workforce and major AI firms such as Anthropic and OpenAI continue rolling out advanced enterprise tools. This week, Anthropic upgraded its Claude model to improve performance in office-based roles such as human resources, design and wealth management. Earlier this month, software stocks fell sharply after Anthropic introduced updates to its Claude Cowork tool, highlighting investor anxiety about how AI could disrupt white-collar jobs.

Jack Dorsey's Block to cut nearly half its workforce in AI overhaul, shares surge - The Economic Times

The layoffs signal how the AI boom is translating from hype into workforce changes, fueling ⁠long-held concerns ⁠among workers and economists that the technology could eliminate roles even as it boosts productivity and profits.Block on Thursday said it will cut over 4,000 jobs, nearly half its workforce, as part of an overhaul to embed artificial intelligence across its operations, sending shares of the payments firm up 25% in after-hours trading. The layoffs signal how the AI boom is translating from hype into workforce changes, fueling ⁠long-held concerns ⁠among workers and economists that the technology could eliminate roles even as it boosts productivity and profits. "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," CEO Jack Dorsey said in a statement. "I don't think we're early to this realization. I think most companies are late," he added. AI-driven overhaul In a post on social media platform X, Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. He said a smaller ⁠company would also give it space to grow the business the right way, instead of constantly reacting to market pressures. Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale ⁠at which the technology is starting to translate into lower expenses and higher margins in some industries. The layoffs represent "a seminal moment" in the AI era, offering a glimpse into how the technology may fundamentally reshape the corporate world, analysts at Evercore ISI wrote in a note. The company said it expects to incur roughly $450 million to $500 million in restructuring charges. Dorsey said he expects a majority of companies to reach the same conclusion Block did and make similar structural changes. "I'd rather get there honestly and on our own terms than be forced into it reactively." Analysts at Truist said the stock was likely surging on hopes of better-than-expected 2026 margins as a result of the workforce reduction. Earnings momentum Block posted an adjusted profit of 65 cents per share in the three months ended December 31, compared with 47 cents a year earlier. Gross profit grew 24% in the quarter, driven by ⁠a 33% surge in the Cash App business, which enables peer-to-peer mobile payments. Block said it believes it can sustain Cash App's strong gross profit growth and continue accelerating Square's gross payment volume over the next three years. For the first quarter, Block forecast gross profit would rise 22% from a year earlier to $2.80 billion. It also slightly raised its 2026 gross profit growth forecast to 18% from a preliminary view of 17%, while saying it continues to take a "prudent approach" towards both its quarterly and full-year outlook. The results come as consumer spending remains resilient despite elevated interest rates, sustaining transaction volumes across the payments sector. The results cap a broadly upbeat holiday-quarter reporting season for the payments sector, with Visa and Mastercard also posting solid results.