Jack Dorsey said employees across companies should brace themselves for similar large-scale layoffs. – jim watson/AFP/Getty Images
Jack Dorsey isn’t wasting any time. The chairman and co-founder of Block is cutting 40% of the payments company’s workforce, or more than 4,000 employees, betting artificial-intelligence tools can fill the gap.
Here’s how he explained the decision.
Dorsey said Block, which owns Square and Cash App, is financially sound. Instead, the tech entrepreneur argues that companies need flatter structures and fewer employees to thrive in the AI era.
“Intelligence tools have changed what it means to build and run a company,” Dorsey said Thursday on a call with analysts. “A significantly smaller team using the tools we’re building can do more and do it better.”
Block is already seeing the change internally, he added, “and intelligence tool capabilities are compounding faster every single week.”
A big challenge for companies wanting to restructure is how to minimize disruption and maintain the morale of employees sticking around. In a memo to Block staff that was posted on X, Dorsey said he had two options: To cut gradually over time or “be honest about where we are and act on it now.”
He favors the second option. “Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” Dorsey wrote.
Employees across companies should brace themselves for similar large-scale layoffs, Dorsey predicted.
“Within the next year, I believe the majority of the companies will reach the same conclusion and make similar structural changes,” Dorsey told analysts. “I don’t think we’re early to this realization. I think most companies are late.”
Large-scale layoffs at Block won’t just impact the company’s workers. Its customers will feel the shift too, Dorsey said.
The use of AI tools means customers will be able to build their own features directly, he said, on top of the company’s capabilities.
Dorsey acknowledged that such a big cull could risk Block’s ability to serve its customers in the short term. But he remains defiant.
“A decision at this scale carries risk. But so does standing still,” Dorsey said in his memo.