Jack Dorsey Announces Massive Block Layoffs Amid AI Shift

TDT | Manama

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Twitter co-founder Jack Dorsey has announced that his technology firm, Block, is laying off nearly half of its workforce. Dorsey explained that this drastic measure is necessary because artificial intelligence fundamentally changes the nature of building and running a modern company. In a letter to shareholders, he predicted that within the next year, the majority of companies will reach this same conclusion and implement similar structural changes. As a result of this pivot, the headcount at Block—the parent company of Square, CashApp, and Tidal—will drop from 10,000 to fewer than 6,000 employees. While Block has undergone several rounds of layoffs since 2024, this marks the first time it has explicitly cited AI as the primary reason for redundancies, signaling a major shift in the tech industry’s employment landscape.

This trend is reflected across the sector, with Amazon laying off 16,000 employees at the end of January, following a cut of 14,000 roles just months prior. Brian Olsavsky, Amazon’s chief financial officer, noted during a financial results call that the company is aggressively pursuing cost reductions in other areas specifically to ramp up its spending on AI. Similarly, industry leaders Meta, Microsoft, and Google have all reduced their workforces as their strategic focus shifts toward massive AI investments. Meta's co-founder and chief executive, Mark Zuckerberg, has expressed his expectation that 2026 will be the year AI dramatically alters the way work is performed, noting that projects previously requiring large teams are now being accomplished by a single, highly talented individual.

The widespread adoption of AI tools that automate computer coding, such as Anthropic’s Claude Code or OpenAI’s Codex, has fueled these changes. This automation of tasks that were historically performed by highly trained professionals has sparked significant fears that AI will completely overturn the job market. However, some analysts argue that the immediate threat to employment might be exaggerated by executives eager to appear as though they are ahead of the technological curve. Dorsey remains firm in his stance, suggesting that more change is imminent and that most companies are actually late to this realization rather than early.

Despite the workforce reductions, Block's financial health appears robust. The company's recent financial report showed strong demand for its products and services, leading to increased profits at the end of last year. While the firm expects to incur up to $500 million in restructuring costs as it pivots to this new strategy, investors responded positively, sending shares up by more than 20% in extended trading. Dorsey, who previously co-founded and led Twitter before its acquisition by Elon Musk and subsequent rebranding as X, continues to position Block at the forefront of this AI-centric corporate evolution.