‘Father’ of Twitter: Most companies will eventually have to fire because of AI

On February 26, financial technology company Block announced it would cut 40% of its more than 10,000 employees. Investors reacted positively as the company’s shares jumped 24% in after-hours trading.

Block founder and CEO Jack Dorsey called it a “difficult decision,” while Amrita Ahuja, chief financial officer, said the layoffs help the company prepare for its next phase of long-term growth. “We chose to change the way we operate during a period of accelerating business activity, and saw the opportunity to move faster with smaller, well-capable teams, using AI to automate more work,” Ahuja explained.

Dorsey believes other companies will make similar HR reforms as they see increased efficiency thanks to smart tools. He said: “I believe within the next year, the majority of businesses will come to the same conclusion and make similar structural changes. I want to do it honestly on my own terms instead of being forced to do it passively.”

On X, Dorsey said he was faced with the choice of gradual layoffs over several months, years, or immediate action. In the end, he chose the second option on the grounds that repeated cuts damaged morale, focus and the trust that customers and shareholders placed in the leadership ability of the company’s leaders. Dorsey also assured the new move is not due to difficulties, as the company is operating strongly with gross profits continuing to grow.

According to the announcement on February 26, laid-off employees will receive severance pay of at least 20 weeks depending on seniority, enjoy stock ownership until the end of May, six months of health insurance, company equipment and an additional 5,000 USD.

Block’s decision reflects the trend toward leaner operations as AI develops. Other companies like Pinterest, CrowdStrike and Chegg have previously announced job cuts and directly addressed why AI is reshaping human resources. Amazon also said it needs fewer layers to operate quickly, calling AI “the most powerful transformational technology seen since the Internet” in its layoff announcement last October.

Jack Dorsey co-founded Twitter in 2006 with Evan Williams and Biz Stone. He left the CEO position in 2007 and returned in 2015, then continued to resign in 2021. Twitter was sold to Elon Musk for 44 billion USD in October 2022 and changed its name to X. Dorsey currently focuses on managing the payment company Block, formerly known as Square.