I remember the inbox: a terse note from a CEO saying jobs were gone because of AI. The room tightened—half the team suddenly invisible—and you could hear the future being rationalized. I kept thinking about what the people left behind were told to feel grateful for.
I’m going to walk you through the evidence, the PR framing, and the human cost. You should leave this knowing which parts are signal and which are performance.
Naoko Takeda wrote on LinkedIn that she was offered a 75% raise — and then quit
Takeda, a data scientist at Block, posted that the company offered her roughly a 75% salary boost (90% if you count a one-time bonus) to stay after the cuts. You can feel the moral friction in her words: she watched peers lose jobs and was invited to profit from their loss.
Her choice matters because it exposes how the math of layoffs can be misleading. If pay is merely redistributed to a smaller crew, payroll savings might be minimal. Instead of trimming costs, Block may have concentrated compensation on a few people expected to absorb the extra work.
Was Block’s layoff caused by AI?
Dorsey framed the move as inevitable because AI can now handle more work: he pointed to a December jump in tool quality — Anthropic’s Opus 4.6 and OpenAI’s Codex 5.3 — and told Wired those changes let him reimagine company structure. That sounds persuasive until you stack it against other facts.
First, external audits and labor studies are skeptical. Sam Altman warned CEOs against blaming AI for cuts, and a National Bureau of Economic Research paper found less than 1% of job losses last year were attributable to AI, while 90% of surveyed executives reported no employment impact from AI over three years. Second, Block’s own pattern of layoffs—three rounds since 2024 and a rolling 10% cut in February—doesn’t map neatly to a single technological inflection.
Aaron Zamost wrote in the New York Times that cuts looked like cost management, not AI
Zamost, who led communications at Block until 2020, flagged which teams were hit: policy, diversity and inclusion, and other roles not typically replaced by models. That’s a real detail you can verify against public reporting.
When a company removes policy and D&I staff, the move looks like priorities being reshuffled rather than a proclamatory shift to automated labor. You should ask whether the narrative of AI-enabled reinvention is covering standard budget triage—and whether investors are getting performance theater dressed up as strategy.
Are companies using AI as an excuse for layoffs?
Yes, there’s a pattern often called “AI washing”: executives citing AI to make cuts that would have been defensible on other grounds. Shareholder optics favor bold tech narratives, and blaming models makes the cuts sound forward-looking instead of reactive.
This posture can be cynical. Offering retention bonuses to a skeleton crew while claiming technology did the heavy lifting reads like rearranging deck chairs on a sinking ship, and it shifts the moral burden onto employees forced to profit from colleagues’ pain.
Jack Dorsey told Wired he saw a shift in December when Opus 4.6 and Codex 5.3 got better — and then doubled down on a vision
Dorsey described a rapid change: tools that could go from prototypes to managing large codebases. He said Block should feel like a “mini AGI” and that customers would build on top of the platform. That’s his thesis and his sales pitch to investors.
But his messages wobble. In one interview he framed the cuts as proactive, in another he admitted to over-hiring during COVID. The company’s previous rounds of layoffs were justified by “performance” metrics, not AI capability. When executive narratives shift to fit the exit ramp, you’re left holding the story rather than evidence.
The operating reality may be messier: a bet on composability and customer-driven product creation that still needs humans in the loop. If you imagine Block’s future as a high-pressure setup for mass customization, the current plan looks like cranking the heat and hoping things resolve themselves—an approach that can make a team feel like a pressure cooker.
Did Jack Dorsey overhire during COVID?
Yes. Dorsey has acknowledged over-hiring in that period, and public reporting shows multiple rounds of cuts since. The firm’s headcount cap and prior reductions suggest this is a course correction that predates any single AI leap.
That doesn’t negate AI’s role, but it complicates the story. A future where customers “vibe-code” their own products will likely create new support and security work. So a CEO who fires people in the name of automation may soon have to hire different expertise—if the strategy works at all.
Public signals and private choices: the company you read about isn’t always the company people live in
Board rooms, PR statements, and research citations make tidy narratives. The people who receive severance notices and retention offers live the messy middle. You should weigh the claims about Opus and Codex against who lost jobs and which teams were preserved.
Block’s story will be judged on outcomes: did the company actually reduce labor costs, improve product velocity, or simply move money around while shrinking the bench? I’d watch hiring patterns next—are roles returning in different guises? If they are, the edit may have been tactical rather than technological.
Companies will keep invoking AI because it’s persuasive; you should keep asking whether the truth is cost-cutting dressed as futurism or a genuine shift in how work gets done. What do you think will happen next?