Asger Risom
Nearly half a major tech company’s workforce is gone in a single move — and the reasoning points straight at AI.
More than 4,000 jobs eliminated in a single move. Not because the company was collapsing. Not because revenue had dried up. But as a deliberate reset.
The decision stands out in an industry that has spent the past two years trimming headcount in waves — smaller rounds of layoffs spaced months apart, often framed as “restructuring” or “efficiency measures.” This time, it was different: one sweeping cut, nearly half the workforce gone at once.
The company was Block. And the decision came directly from its CEO, Jack Dorsey.
In a memo posted on X, Dorsey said he would reduce Block’s workforce from more than 10,000 employees to just under 6,000. He argued that repeated layoffs damage morale and create prolonged anxiety, and that a single decisive move was preferable to what he described as a slow bleed.
“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.
Importantly, Dorsey made clear the cuts were not driven by immediate financial distress. The business, he said, is strong and profits are growing.
A shift in how companies think about labor
Dorsey framed the layoffs as part of a broader transformation in how companies operate in the age of artificial intelligence.
He pointed to “intelligence tools” that, when paired with smaller and flatter teams, are enabling what he called a fundamentally new way of working. In this view, AI is not just a productivity boost — it changes how many people a company believes it needs.
That framing is significant. Over the past year, executives across the tech industry have sent mixed signals about AI and employment.
Some leaders have openly warned of disruption. Anthropic CEO Dario Amodei has cautioned about severe white-collar displacement. Klarna’s CEO has said his company’s workforce has already shrunk dramatically in recent years and is expected to shrink further, partly due to automation.
At the same time, other executives have pushed back against the idea that AI will cause mass unemployment, arguing instead that it will augment workers rather than replace them.
Block’s move lands squarely in the middle of that debate.
The case for one “clean break”
Dorsey rejected the more common strategy of incremental cuts, arguing that repeated rounds create “layoff fatigue” and chronic anxiety inside companies. Management experts have noted that prolonged uncertainty can erode productivity and trust more than a single, painful decision.
Laid-off employees at Block will receive 20 weeks of base pay plus an additional week for each year of tenure. Equity will continue vesting through the end of May, along with six months of health coverage. The company is also allowing departing staff to keep corporate devices and receive a $5,000 payment.
Even so, the scale of the reduction — roughly 40% of the workforce — is rare for a profitable tech company.
Shares of Block rose sharply in after-hours trading following the announcement.
A preview of what’s next — or an outlier?
The deeper question is whether this was a one-off executive choice or an early signal of a broader shift.
Research firm reports have warned that AI could displace tens of millions of roles globally over the coming years, even as new ones are created. The World Economic Forum, for example, has projected both large-scale displacement and large-scale job creation by the end of the decade, suggesting a turbulent transition rather than simple decline.
The report predicts that 92 million workers will be displaced by 2030, it also said 170 million roles will be created in that time frame, resulting in a net increase.
Meanwhile, companies are racing to demonstrate AI-driven efficiency to investors. In that context, workforce reduction can be interpreted not only as cost-cutting but as proof of technological leverage.
If AI systems can take over coding tasks, customer service workflows, compliance reviews, or internal operations that once required entire teams, executives may begin to rethink staffing levels more aggressively.
But there is still no clear consensus on how far — or how fast — that shift will go.
Block’s sweeping reduction may ultimately be remembered as either an overcorrection or the first visible step in a deeper structural change to white-collar work. What makes it notable is not just the number of jobs cut, but the reasoning behind it: not survival, but redesign.
If more companies adopt that logic, the “AI workplace reset” may not arrive gradually. It may arrive all at once.
Source: Business Insider
