Jack Dorsey, the co-founder and CEO of financial technology company Block, has announced plans to hire senior artificial intelligence engineers, a move that follows the firm's decision to cut its global workforce by approximately 40%. The layoffs, confirmed in a memo to staff on Thursday, will reduce headcount from around 10,000 to just under 6,000 employees.
Dorsey stated the restructuring was not due to financial distress but a strategic shift enabled by AI, which he said is unlocking "a new way of working" with "smaller and flatter teams." Block's stock rose nearly 23% in after-hours trading following the earnings call where the plans were detailed.
AI Drives Productivity and Restructuring
In the internal memo, Dorsey emphasised that Block's business remains strong, with growing gross profit and customer numbers. "But something has changed," he wrote, attributing the shift to advancements in AI. He revealed on the earnings call that the company has seen a 40% increase in production code shipped per engineer since September, thanks to new AI tools.
"We've seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time with agentic coding tools," Dorsey told investors and analysts.
Strategic Hiring Amid Workforce Reduction
Despite the significant layoffs, Dorsey outlined an intention to continue investing in talent. "We see meaningful opportunity to invest in our people and invest in hiring," he said during the call.
He specified that Block expects "to hire some more senior AI engineering talent who will continue to level up our engineering and product capabilities." This indicates a strategic pivot towards a more specialised, AI-focused workforce.
Broader Industry Trend
The move reflects a wider trend across industries where AI is automating tasks and reshaping roles. A study by Stanford University researchers has noted a decline in early-career positions in fields like software engineering and customer service as automation increases.
Some workers report increased responsibilities alongside productivity gains, a phenomenon one software engineer described to Business Insider as leading to "AI fatigue."
Next Steps and Official Response
Dorsey and a spokesperson for Block did not immediately respond to a subsequent request for comment from Business Insider. The company's immediate focus will be on managing the transition for departing employees while initiating its search for senior AI experts to drive its future product development.