Jack Dorsey just halved the size of Block’s employee base — and he says your company is next

Jack Dorsey’s payments company, Block, is cutting its global workforce by nearly half, laying off more than 4,000 employees in a single, decisive action. The move, which reduces the company's headcount from over 10,000 to just under 6,000, sent its stock surging more than 24% in after-hours trading. This aggressive restructuring closely mirrors Elon Musk’s 2022 layoffs at Twitter (now X), where Dorsey was a key investor, suggesting a new, more severe playbook for corporate downsizing is becoming normalized among tech's most prominent leaders.

The company is officially attributing the cuts to its strategy of leveraging artificial intelligence. Block CFO Amrita Ahuja stated the move will enable "smaller, highly talented teams using AI to automate more work." Dorsey defended the deep, one-time cut as an alternative to repeated layoffs, which he argued are "destructive to morale." In a post on X, he predicted most companies will arrive at a similar place within a year, stating he would "rather get there honestly and on our own terms than be forced into it reactively." U.S. employees impacted will receive a severance package that includes 20 weeks of salary, extended equity vesting, and six months of health care.

Block joins a growing list of major tech firms, including Salesforce and Amazon, that have cited AI efficiency as a rationale for significant staff reductions. This trend is solidifying a narrative where AI serves as the primary justification for widespread layoffs, even as research firms like Forrester cast doubt on the immediate reality of those productivity gains versus more traditional financial motivations. Dorsey’s bold prediction that others will follow suit suggests the industry may be on the cusp of a broader recalibration of workforce size, with AI as the catalyst, or at least the official explanation.

The 'Musk model' of massive, single-stroke layoffs justified by AI efficiency is gaining legitimacy among high-profile tech leaders, signaling a potential new playbook for corporate restructuring that prioritizes immediate investor reaction over workforce stability.