Block Inc., the parent company of Cash App and Square, has laid off approximately 40% of its workforce, or 4,000 employees, in a sweeping restructuring that CEO Jack Dorsey directly attributed to advancements in artificial intelligence. The announcement was made on Thursday via a company memo and detailed on an earnings call, sending the firm's stock up nearly 17% by Friday's close.
Dorsey stated the company is positioning itself to lead in the AI era, claiming recent leaps in capability have shown a path to applying the technology to "nearly every single thing that we do." He argued the cuts were a proactive move to "get ahead of this shift rather than be forced into it reactively."
Internal AI Push Preceded Cuts
In the months leading to the layoffs, Block had been actively promoting internal AI tools. Former employees described an environment where AI adoption was encouraged, with some teams viewing it in an almost "celebratory" way. Ivan Ureña-Valdes, a data analyst laid off after four years, told Business Insider he used AI tools "as much as possible every single day" and had sensed the technology's improving capabilities.
"I had a hunch that, at some point, the company would cut people because of AI. I just didn't think it would be right now," Ureña-Valdes said. Another former software engineer said the company had warned that output expectations for engineers would increase, leaving teams concerned about quality.
'Gratitude' Call and Employee Reaction
Two hours after the layoff announcement, Dorsey held a company-wide video call titled "gratitude," wearing a baseball cap with the word "love." He explained the decision in his "trademark monotone," according to attendees. While some employees thanked him, the call's chat was flooded with thumbs-down, thinking face, and crying-laughing emojis from muted participants.
Several affected workers expressed shock at the scale of the cuts, with one non-technical employee stating they and many colleagues were "actively building with AI." Another employee laid off on Thursday said she had caught errors in a company chatbot just the day before, highlighting the technology's continued need for human oversight.
Scepticism Over AI as Primary Driver
Industry observers and some former employees question whether AI was the sole or primary reason for the deep cuts. Jason Schloetzer, a business professor at Georgetown University, noted that from his discussions with executives, such dramatic efficiency gains from AI are largely unseen outside software development.
Some point to pandemic-era overhiring and a broader trend of tech sector consolidation. A laid-off worker noted leadership had repeatedly signalled the need for a "smaller Block." Leadership consultant Chris Kaufman suggested such large-scale layoffs are typically "macro decisions about cost structure," not audits of AI proficiency.
Broader Industry Implications
Block's move, explicitly linked to AI, has intensified fears of a "white-collar jobs apocalypse" across sectors. It follows similar signals from other tech giants; Amazon CEO Andy Jassy has indicated AI could lead to white-collar job cuts, while Salesforce's Marc Benioff cited AI agents for customer support reductions last year.
For now, investors have endorsed Dorsey's strategy. Block's share price, down roughly 16% year-to-date before the announcement, rallied strongly on the news of cost-cutting and an AI-focused future.