2026-02-27T03:14:37.944Z
Share
Email
X
Bluesky
Threads
lighning bolt icon
An icon in the shape of a lightning bolt.
Impact Link
Save
Saved
Read in app
This story is available exclusively to Business Insider
subscribers. Become an Insider
and start reading now.
Have an account? Log in.
Jack Dorsey announced major layoffs at Block, cutting nearly half of its workforce.
Dorsey said AI was behind the cuts, and the company’s stock rose over 20% in after-hours trading.
Tech and VC leaders have reacted to Block’s layoffs, with some calling it a sign of what’s to come.
Jack Dorsey’s announcement on Thursday that Block was slashing its workforce nearly in half sent shockwaves through the tech world.
Dorsey, Block’s CEO and cofounder, said AI was rapidly changing work at the financial services company, which owns Square, Cash App, and Afterpay.
“A significantly smaller team using the tools we’re building can do more and do it better,” he said on Thursday’s earnings call, shortly after the reduction in force was shared on X.
“I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now,” he wrote in a memo. “I chose the latter.”
Block’s stock was up over 20% in after-hours trading following the announcement. Shares were down more than 16% in the last year as of market close on Thursday.
Leaders in tech and venture capital quickly reacted to the news, with some saying it could be the first of what’s to come as AI fundamentally transforms companies and the nature of work. Others were more skeptical of AI’s role.
Here’s what smart people are saying about the job cuts at Block.
Clara Shih
Clara Shih.
PATRICK T. FALLON/AFP via Getty Images
“Square is just the beginning,” Clara Shih, a startup investor and senior advisor at Meta, said in an X post.
“Every CEO faces the same decision today that manufacturing CEOs did in 2000: do a big layoff or your competitor will, pass on cost savings to customers and investors, and beat you.”
“In 2000, jobs were lost to Shenzhen. In 2026, jobs will be lost to AI,” she added.
Balaji Srinivasan
Balaji Srinivasan.
Steve Jennings/Getty Images for TechCrunch
“This is the first AI cut,” tech investor Balaji Srinivasan said on X. “And it will send shockwaves.”
The Silicon Valley venture capitalist said the Block cuts were a “signal to everyone in tech: get good now. Become indispensable. Work nights and weekends. Learn the AI tools and raise your game. Or you might not make the cut, as an employee or as a company.”
Matt Shumer
Matt Shumer.
Courtesy of OthersideAI/Reuters
Matt Shumer, an AI CEO who wrote the viral “Something Big is Happening” essay earlier this month, said this is “one of the first major examples of AI driving layoffs, but certainly not the last.”
“If you’re saying ‘this won’t happen to me’, re-evaluate your thoughts. Now,” he said on X. “It may be the most important thing you do.”
Alap Shah
“Staggering news from @jack and Block today, proactively laying off 40% of the team,” investor Alap Shah said on X, calling the move “a textbook example of the changes we are warning about.”
Shah coauthored the viral Substack post “The Global Intelligence Crisis” with Citrini Research, which outlined a hypothetical 2028 scenario in which rapid AI adoption leads to mass white-collar layoffs.
He added that while the cuts are “devastating for those affected,” they reflect “a cold look at the nature of AI’s progress: companies can accelerate output while drastically lowering coordination costs.”
Aakash Gupta
“Block is the canary in the coal mine,” Aakash Gupta, host of “The Growth Podcast,” said on X. “And they’re not alone.”
Gupta said Dorsey “said the quiet part out loud: intelligence tools paired with smaller teams have already changed what it means to run a company.”
“Block went from 10,000 to 6,000 while growing revenue and raising guidance. Every CEO running a company with more than a few thousand employees is doing this math tonight,” he added. “The canary just stopped singing.”
Gergely Orosz
“Hard to read too much into the massive (40%) Block layoffs in its rationale or not, because Jack Dorsey has always been very unpredictable on how he ran his companies,” Gergely Orosz, a software engineer and author of the “Pragmatic Engineer” newsletter, wrote on X.
“But it’s true that in uncertain times, CEOs look for certainty, and someone acting confident is often copied,” he added.
In a follow-up post, Orosz pointed to Elon Musk’s takeover of Twitter, now known as X — a company Dorsey cofounded — and the roughly 75% staff cuts Musk presided over.
Those layoffs, he said, “clearly” influenced other CEOs to make “decisive” reductions, even if not as extreme, and remained a frequent reference point among decision-makers for nearly a year.
Ben Carlson
Ben Carlson, a financial analyst and director at Ritholtz Wealth Management, expressed skepticism that the cuts were purely driven by AI innovation, sharing a chart that shows Block’s share price is down sharply from its high point in 2021.
“Maybe Block laying off a ton of employees is a sign that AI is gonna destroy everything,” he wrote on X. “Or maybe the stock is down 80% from the highs and they overhired and AI is a convenient excuse.”
Jessica Verrilli
“Feels inevitable this is about to ripple through every public company,” Jessica Verrilli, cofounder of VC firm Adverb Ventures, said on X. “We’ve gotta find a way to make everyone an owner w/ some exposure to the upside as the # of employees falls off a cliff.”
Jason Calacanis
Jason Calacanis.
JC Olivera/Variety via Getty Images
Jason Calacanis, angel investor and co-host of the “All-In” podcast, praised Dorsey for the cuts.
“Leadership is hard, but this feels like (another) visionary move,” he said on X. “Have never sold a share, since being a private investor in square.”
Shaun Maguire
Sequoia partner Shaun Maguire.
Brendan Smialowski/AFP via Getty Images
“Respect to @jack for doing the hard thing,” Shaun Maguire, partner at Sequoia Capital, wrote on X. “While doing it intentionally and owning the decision.”
Zach Wilson
“Jack Dorsey laying off 50% of Block is just the beginning,” Zach Wilson, founder of DataExpert.io and a former senior data engineer at Airbnb, Netflix, and Facebook, wrote on X.
He predicted that “we’re going to see a larger number of jobs lost in 2026 and 2027 than we saw in 2008 and 2009.”
“The weird part this time around is the work will still be getting done and we’ll have tons of people desperate to find their new ‘home,'” he added, suggesting many workers will retrain as “AI engineers or context engineers,” while others retire or move into lower-paying roles.
David Churchill
David Churchill, an associate professor of computer science at Memorial University in Canada, criticized Dorsey’s framing of the layoffs.
“One of the things that Dorsey said, which really stuck out to me, is that he said, ‘I had two options,'” Churchill told Business Insider. “Do you notice how he created that false dichotomy? … For him to say, ‘I had two options,’ that is obviously incorrect.”
Churchill said AI may boost productivity in some contexts, particularly for startups, but called it “a perfect scapegoat for upper management” when companies want to cut staff.
“It is certainly a great excuse to have in your pocket when you want to get rid of a bunch of people,” he said.