Jack Dorsey fires 4,000 people from his firm — and then says something even more alarming
There are people who try to paint a positive picture of the job market in the age of AI, but the risk of artificial intelligence putting people out of work is real. Recently, Block, co-founded by Jack Dorsey, laid off almost half of its workforce, and he indicated that there could be more to come in the near future. Dorsey explained that a significantly smaller team operating AI tools is the way forward, as such technologies evolve rapidly and prove to be more efficient.
Block, which has a workforce of more than 10,000 people, asked more than 4,000 people to clear out their desks or enter into consultation according to a SFGATE report. This wave of layoffs saw more people lose their jobs than in March last year, when 931 employees lost their jobs. The company recently reported a $1.3 billion profit, which Dorsey termed a strong year. Such a high number of people losing their jobs despite such a strong year won’t do much to reassure employees of their job security.
“The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. 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,” Dorsey wrote in a letter to shareholders. The Block boss also predicted that other companies would come to do the same in the future as they realize the efficiency of working with a small team and intelligence tools.
“I don't think we're early to this realization. I think most companies are late. 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 added. “And this isn't just about efficiency. Block serves millions of customers. Sellers and consumers who are going to feel the economic effects of this same shift.”
Dorsey even took to X to explain his reason for laying off so many people at once. He ensured that the people who were being laid off would receive their salary for 20 weeks and one week per year of tenure, equity vested through the end of May, six months of health care coverage, corporate devices, and $5,000 to help them with the transition.
“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. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” he explained. “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,” Dorsey concluded.
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