Jack Dorsey’s payments company ‘Block,’ founded by a Twitter co-founder, plans to cut nearly half of its workforce due to the implementation of artificial intelligence (AI) tools. As reported by Bloomberg and the Wall Street Journal on the 26th, Block intends to reduce its workforce by more than 4,000 out of 10,000 employees. Dorsey highlighted AI tools as the reason for this reduction in a letter to shareholders, stating that AI has fundamentally changed the way the company operates.
Dorsey noted, “We are already witnessing this internally,” suggesting that a smaller team using these tools can accomplish more and perform better. He added, “I don’t think we realized this early. In fact, I think most companies are late to this realization.”
He also predicted that within a year, most companies would reach similar conclusions and undertake comparable structural changes. During an earnings call, Dorsey mentioned that they realized the capabilities of AI models last December.
In a memo to employees posted on X (formerly Twitter), Dorsey clarified that the decision to cut staff was not due to company difficulties. He acknowledged the choices between gradually reducing staff over several months or years as changes unfold and acting decisively now, ultimately choosing the latter option.
Bloomberg reported that Block has been restructuring its business model and workforce since 2024, amid weak stock performance. Following the announcement, Block’s stock price soared by more than 25% in after-hours trading.
The reduction in staff due to AI advancements has been spreading across tech companies. As AI continues to replace existing business models, fears around employment deterioration due to technological advancements are expected to rise.
Financial Times identified Block’s layoffs as one of the clearest signals of the widespread impact AI tools have on employment. Meanwhile, Australia’s logistics software company Wisetech Global announced plans to reduce its workforce by about 30%, equating to around 2,000 jobs. The company’s CEO, Richard White, stated, “The era of manually writing code as a core engineering activity is over.”
In January, the world’s largest e-commerce company Amazon also announced additional layoffs, targeting about 16,000 employees, mainly in office roles, as they expand investments in AI. In October last year, Amazon announced layoffs of 14,000 employees, with AI innovation cited as a backdrop by Beth Galetti, Amazon’s senior vice president.