Additional Coverage:
- Jack Dorsey fires 4,000 people from his firm — and then says something even more alarming (marketrealist.com)
Tech Titan Jack Dorsey Cuts 4,000 Jobs, Citing AI as the Future of Lean Operations
San Francisco, CA – In a move sending ripples through the tech industry, Jack Dorsey’s financial services company, Block, has significantly reduced its workforce, laying off more than 4,000 employees. The decision, nearly half of the company’s total staff, comes despite Block reporting a robust $1.3 billion profit last year, a period Dorsey himself described as “strong.”
The mass layoffs have sparked concern regarding job security in an increasingly AI-driven market. Dorsey, co-founder of Block, articulated his vision for a significantly smaller team, empowered by evolving artificial intelligence tools, as the path forward. He indicated that this could be a precursor to further reductions.
According to an SFGATE report, over 4,000 individuals were asked to clear their desks or enter into consultation, marking a more extensive layoff wave than the 931 employees let go in March of last year. This substantial reduction, even in the wake of strong financial performance, is unlikely to reassure the remaining workforce.
In a letter to shareholders, Dorsey outlined his core thesis: “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.
And intelligence tool capabilities are compounding faster every week.” He further predicted that other companies would soon follow suit, recognizing the efficiency of a lean team augmented by AI.
“I don’t think we’re early to this realization. I think most companies are late,” Dorsey stated.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively.”
He emphasized that this shift extends beyond mere efficiency, impacting the millions of customers Block serves.
Dorsey also took to X (formerly Twitter) to elaborate on his rationale, explaining his choice to make a decisive cut now rather than protracted, gradual reductions. He ensured that affected employees would receive 20 weeks of salary, an additional week’s salary per year of tenure, equity vested through the end of May, six months of health care coverage, corporate devices, and $5,000 for transition assistance.
“I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter,” Dorsey explained.
“Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. 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.”