Block Halves Its Workforce—Why Jack Dorsey Says 'Most Companies Will Be in the Same Place Within a Year'
Block, founded by Jack Dorsey (the payment company that operates Square, Cash App, and Tidal), has announced a reduction of more than 4,000 employees, nearly half of its total workforce. The headcount is expected to drop from over 10,000 to just under 6,000 following the cuts. Following the announcement, the stock price rose more than 24% in after-hours trading.
This move, which cites a shift toward a smaller, high-efficiency team structure leveraging AI, once again highlights the trend of organizational downsizing in the tech industry and raises questions about the reality of AI-driven automation.
1. Overview and Background of the Reductions
1-1. Scale and Terms of the Reductions
Block will compress its workforce from over 10,000 to just under 6,000.Affected employees in the U.S. will be offered severance pay consisting of 20 weeks of salary plus one week for every year of service, equity vesting through the end of May, six months of healthcare coverage, company-provided devices, and $5,000 for career transition support. The company states that employees outside the U.S. will receive equivalent support in accordance with local regulations.
1-2. Dorsey's Words—'Before We Are Forced'
On X (formerly Twitter), Dorsey positioned this decision not as a financial emergency, but as a proactive judgment.
“Repeating layoffs is bad for morale, focus, and trust from customers and shareholders,” he wrote, adding, “I want to get there on my own terms, with integrity, rather than being forced.”
He further predicted that “most companies will be in the same place within a year,” a statement that can be taken as a warning to the entire industry.
2. AI Is Cited as a Reason, But...
2-1. Official Explanation
Block CFO Amrita Ahuja stated that these cuts would allow the company to “leverage AI to automate more tasks while building a structure where smaller, high-performing teams can move faster.” Salesforce and Amazon have similarly implemented large-scale layoffs citing AI-driven productivity gains, and tech companies are increasingly downsizing with AI as the stated reason.
2-2. Doubts About the Reality of AI-Driven Layoffs
However, this explanation of “AI-induced layoffs” requires some reservation. A report released by Forrester Research this February questioned whether the reality of AI efficiency or financial motives were the primary driver of the cuts. There is also a view that citing AI as a reason for layoffs serves as a context to justify staff reductions aimed at financial improvement.
3. The Context of the Relationship with Elon Musk
3-1. Twitter's 50% Cut Set a Precedent
In November 2022, immediately after taking Twitter (now X) private, Elon Musk cut approximately 50% of the workforce at once. At the time, it was perceived in Silicon Valley as a rewriting of the “unwritten rule” that a CEO could go that far in a single stroke.
Dorsey was one of the people who witnessed that process from a unique position. This is because he chose not to cash out his Twitter shares (approximately 2.4%) during Musk's acquisition, opting instead to become one of the external investors in X (formerly Twitter).
3-2. A Complex Relationship
The relationship between the two is sometimes described as “one of the strangest in the tech industry.” Dorsey initially supported Musk's acquisition of Twitter, but later stated that “Musk should have walked away.” He was involved in the launch of the decentralized social network Bluesky, only to resign from its board, and has called X a “technology of freedom.” They are aligned in their support for Bitcoin, and both Block and Tesla hold BTC on their balance sheets.
Summary
Block's decision is presented not just as a financial necessity, but as a judgment based on Dorsey's own organizational theory and his predictions for the future of work as transformed by AI. Whether Dorsey's words that 'most companies will be in the same place within a year' prove prophetic will be answered by the future actions of these firms. Meanwhile, as suggested by the Forrester report, how to distinguish between AI-driven efficiency and financial motives remains a difficult question.