Jack Dorsey Cuts 4,000 Block Jobs Citing AI — Predicts Every Company Will Follow

In an internal memo obtained by TechCrunch, Dorsey wrote that Block had grown too large and too slow. He argued that a smaller team armed with AI tools could accomplish more than the bloated organization he had inherited. The key quote: "A smaller team using AI tools can do more and do it better." Dorsey did not frame the layoffs as a response to financial pressure. Block's gross profit was still growing year-over-year, and the company's Cash App and Square ecosystems remained profitable. Instead, he positioned the move as a proactive restructuring — an attempt to build what he called an "AI-native company" before competitors forced the change. Perhaps most provocatively, Dorsey predicted that "the majority of companies will reach the same conclusion within a year." This was not a hedge or a qualified statement. He was telling the entire tech industry: your headcount is next.

Bloomberg's investigation into Block's layoffs raised an uncomfortable question: is AI actually replacing these jobs, or is it being used as a convenient narrative for cost-cutting? The evidence is mixed. On one hand, Block's gross profit was growing and the company was not in financial distress — suggesting the cuts were strategic, not desperate. On the other hand, several analysts pointed out that Block had been overstaffed since its pandemic-era hiring spree, and the layoffs brought headcount closer to where it probably should have been all along. The concept of "AI-washing" — analogous to greenwashing in environmental claims — describes companies that attribute workforce reductions to AI capabilities that may not yet exist at the scale implied. When a CEO says "AI can now do the work of 4,000 people," the burden of proof should be substantial. But in a market rewarding efficiency narratives, the incentive to overstate AI's role is enormous.