Jack Dorsey cited AI as the driving drive behind reducing 40% of his firm’s staff, however different elements akin to a weak crypto market, overstaffing and a declining inventory worth might also have motivated the transfer.
Final week, the monetary expertise firm Block introduced that it might lay off 4,000 of its 10,000 staff. Dorsey, Block’s CEO, stated in a letter to shareholders that advances in AI “have modified what it means to construct and run an organization”.
“We’re already seeing it internally. A considerably smaller crew, utilizing the instruments we’re constructing, can do extra and do it higher. And intelligence software capabilities are compounding quicker each week,” he wrote. He additionally stated that Block’s enterprise remained robust and that these cuts weren’t an austerity measure.
Can AI function 40% of a enterprise? Maybe, however different specters hang-out Dorsey’s firm.
The CEO, and by extension Block, has gone all-in on crypto for the higher a part of a decade, rebranding in 2021 from Sq. to Block to evoke “blockchain”. At the time, Dorsey redirected the enterprise in the direction of blockchain and Bitcoin in addition to the profitable Money App. The corporate announced in 2024 that it might make investments 10% of its gross revenue from bitcoin merchandise into bitcoin itself.
An organization that has targeted its enterprise on cryptocurrency could produce other causes than the miracle of AI to trim its workers. Estimates based mostly on Block’s public monetary filings peg its bitcoin holdings round 8,500 BTC. Bitcoin has misplaced almost 1 / 4 of its worth since the starting of the yr, and the broader cryptocurrency market has proven related lackluster efficiency. Earlier than Dorsey’s announcement, Block’s inventory had declined by some 35% since a peak in October.
The mixture of a crypto winter and a weak inventory worth gives a much less futuristic, extra tangible, rationale for Dorsey’s cuts. With the radical layoff announcement, he did obtain an instantaneous consequence: Block’s inventory popped by 20%, development it sustained in the ensuing days.
Markets have responded unpredictably to layoff bulletins in the tech world in current months.
Simply before two current quarterly earnings calls, October 2025 and January 2026, Amazon introduced the layoffs of 14,000 and 16,000 staff, respectively. After the 2025 name, the ecommerce big’s share worth rose sharply. Its inventory worth sank after its January 2026 announcement as a result of Amazon’s prices had risen astronomically due to spending on datacenters, an issue Block does not have.
Salesforce lower 4,000 buyer help staff final yr as a result of CEO Marc Benioff stated that AI might deal with some 50% of buyer interactions. The corporate has solely seen its inventory worth drop in response, as traders see the software program sector, of which Block is additionally a member, as particularly weak to disruption. Goldman Sachs present in a November 2025 analysis that firms saying layoffs underperformed the market. Companies that particularly referenced restructuring, usually in response to automation and technological advances, lagged even additional.
A former enterprise lead at Block wrote a prolonged blog post about the overstuffed groups exterior of the “bitcoin {hardware} crew” and the firm’s “bloated headcount period”, which started in 2020, fueled by almost nonexistent rates of interest in the US.
Dorsey has overstaffed firms before. The CEO argued on X that whereas Block did overhire in the previous, that problem was resolved in 2024, and the current cuts have been unrelated.
How Block capabilities after these deep workers cuts will supply perception into what AI is able to in the absence of human staff. Bosses throughout the US are elevating their expectations of productiveness based mostly on AI’s promise. The strain is particularly excessive on software program engineers, whose work might be achieved, a minimum of partly, by AI coding fashions. Startup founders are working themselves into the floor for worry that their rivals are getting extra achieved.
Thus far, although, AI appears to be including extra work than it automates for the majority of staff. A Harvard study of a 200-person expertise firm printed final month discovered: “AI instruments didn’t scale back work, they constantly intensified it.” Block’s remaining staff could now discover themselves in the identical state of affairs.
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