Jack Dorsey lays off thousands of people at Block and claims: ‘Most companies will do the same, the rules are changing’

“Intelligence tools have changed the rules of the game”

In a letter to shareholders that followed the announcement of strong business results for the latest quarter, Dorsey was brutally direct. He announced that the workforce of Block, the company behind popular services such as Square and Cash App, is being reduced from more than ten thousand to less than six thousand people.

“The basic thesis is simple. Intelligence tools have changed what it means to build and run a company. A significantly smaller team, using the tools we’re building, can do more and do it better,” Dorsey wrote, adding that the productivity of their engineers is growing week by week thanks to internal AI tools.

His message was not limited to his own company. Dorsey made a bold prediction that should worry workers around the world.

“I believe that within the next year, most companies will come to the same conclusion and implement similar structural changes. I don’t think we are early with this realization, but that most companies are late,” he said.

Wall Street celebrates, stocks explode

As Block employees received news of the layoffs, Wall Street investors celebrated. Immediately after the announcement, the company’s shares jumped by more than 20 percent. The reason is clear: the market has rewarded a decision that, according to their assessment, leads to a drastic increase in efficiency and profitability. Analysts called the move a “pivotal moment” in the era of artificial intelligence, the first concrete evidence of how announcements of the AI ​​revolution are leading to real business decisions with huge consequences.

Paradoxically, the layoffs do not come at a time of crisis for Block. The company reported a 24 percent increase in gross profit in the last quarter, and Dorsey emphasized that business is booming. The decision, he claims, is strategic, not reactive. Instead of gradual layoffs that destroy morale, he decided to make a single, deep cut in order to adapt the company to the new reality. The goal is now to reach more than two million dollars in gross profit per employee, which is four times more than before the pandemic.

Is artificial intelligence just a good excuse?

Although many see Dorsey’s move as visionary, there have been doubts. Some analysts warn of the phenomenon of “AI washing”, i.e. the use of artificial intelligence as a convenient excuse for mass layoffs which are actually caused by other problems, such as over-employment during a pandemic or poor management. Block has almost doubled the number of employees between 2020 and 2025, while the value of their stock has fallen by more than 75 percent in the last five years.

Ethan Mollick, a professor at the prestigious Wharton and a well-known voice in artificial intelligence circles, expressed skepticism. He pointed out that “it is hard to imagine that new AI tools in such a short period of time led to a sudden increase in efficiency of 50 percent, which would justify such massive cuts”. Block isn’t the only tech giant downsizing, though. Amazon, Meta and Google have also implemented significant layoffs, diverting huge resources into AI development. Mark Zuckerberg from Meta predicted that 2026 will be “the year in which artificial intelligence will dramatically change the way we work”, emphasizing that projects that once required large teams can now be done by one exceptionally talented person.