I remember reading Jack Dorsey’s memo on a flight, headphones on, and feeling the cabin go quiet around me. The note landed like a verdict: Block would shrink from about 10,000 people to 6,000, and thousands would be told to leave. You could sense the company choosing a fast cut over a slow bleed.
I’ll be direct with you: this is less about profits and more about how leaders are selling a future where intelligence tools let firms run on tiny teams. I’m sharing what I heard, why it matters, and what to watch next—so you can judge whether this is realism or rhetoric.
On an internal post, Dorsey said the cuts are driven by new intelligence tools
He announced the reduction on X and in a shareholder letter: Block will drop to roughly 6,000 people from about 10,000. He was blunt—this isn’t a cash emergency; gross profit and customers are growing. Instead, he argued that AI and related tools let teams be “smaller and flatter,” so the company can operate with fewer hands on deck.
Why did Block cut its workforce so steeply?
Because, according to management, the company sees a structural shift: the tools they’ve built and adopted are changing how work gets done. You should note two conflicting signals: executive certainty about efficiency, and broad research showing many firms haven’t yet seen real productivity gains from AI investments. That gap matters when CEOs are making irreversible decisions about people.
In morning channels, employees reacted with shock and practical questions
Dorsey said he could have trimmed gradually but chose to act now to avoid repeated morale-sapping waves. He framed it as honesty: cut once, get on with the work. You may sympathize with the logic, and you may also wonder whether rapid cuts trade short-term clarity for long-term loss of institutional knowledge.
Are AI tools really replacing employees?
Executives claim so; surveys say not yet for most. I’ve spoken to engineers and product leads who say AI helps with drafting and analysis, but the judgment, coordination, and context work still needs humans. Think of AI here like a sharp tool—useful for a task, but rarely a substitute for a full craftsman.
At investor briefings, Dorsey predicted others will follow
He told shareholders he expects a majority of companies to reach the same conclusion within a year. That statement functions as a signal: if one visible leader changes course boldly, peers often imitate. You should read this as both a prediction and a bid to set an industry narrative before critics do.
Will other tech companies follow Block’s approach?
Probably some will, especially firms weighing bureaucracy against speed. We’ve already seen big reductions at Amazon, Pinterest, and Vimeo; Amazon alone cut tens of thousands from corporate ranks over recent cycles. But bandwagon cuts aren’t guaranteed—public sentiment toward AI is turning sour, data-center builds are politically sensitive, and CEOs now face a tough optics test during an election year.
In private conversations, Dorsey admitted over-hiring after the pandemic
He later wrote that Block did over-hire post-COVID, though he downplayed that as the main reason for Thursday’s layoffs. I take that as an admission and a reframe: both the hiring excess and the arrival of new tools shaped this moment. You should hold both facts in mind when evaluating the logic he offered.
There’s a pattern forming: companies that expanded quickly during the pandemic then tightened belts, and now some are pressing the same reset-button under the banner of AI efficiency. This reads like a chessboard where the pieces shift to new strategies—some sensible, some defensive.
Sam Altman warned about “AI washing,” accusing firms of attributing layoffs to AI when other motives apply. That’s a valid callout; CEOs have mixed motives. Dorsey’s move sits at the intersection of sincere tech optimism and the old corporate habit of framing workforce changes as inevitable progress.
For employees and investors, the immediate questions are practical: will severance and support match the rhetoric? Will product velocity actually improve? And how quickly will rivals copy this playbook, or push back?
I’ll watch hiring signals, corporate shareholder letters, and product velocity metrics closely. You should too—because when companies claim technology makes mass layoffs unavoidable, the story is as much about narrative control as it is about efficiency. Are these honest structural adjustments, or a convenient way to shave payroll and shift blame?