Jack Dorsey’s Bold Gamble Block Cuts 40% of Staff to Pivot Toward AI Efficiency.
Block Inc., the parent company of Square, Cash App, and Tidal, has announced a major workforce reduction, cutting over 4,000 positions roughly 40% of its 10,000 strong global staff. In a candid memo, founder and CEO Jack Dorsey attributed the decision to a fundamental shift in the business landscape driven by Artificial Intelligence.
The Rationale: Profitability vs. Productivity
Despite Block’s strong financial health and growing profits, Dorsey argues that the traditional corporate structure has become obsolete. "The foundation of how we build a company has fundamentally changed," Dorsey stated. He believes that AI tools now allow the firm to operate at peak efficiency with a significantly smaller headcount.
Faced with two choices gradual, incremental layoffs or a single, decisive cut Dorsey opted for the latter. He noted that "drip-feeding" layoffs would devastate employee morale and erode the confidence of both customers and shareholders. By downsizing immediately, Dorsey aims to position a leaner Block for more agile growth in new directions.
The Severance Package
To support departing employees, Block has offered a substantial transition package, including:
Minimum of 20 weeks’ base pay, with additional weeks based on years of service.
Accelerated equity vesting according to individual compensation terms.
A $5,000 "Transition Cash" payment to assist with immediate financial needs.
Jack Dorsey is a big fan of the "small, high-density teams" concept. He believes that a few highly skilled employees who are proficient in AI will outperform the large number of employees in traditional roles. This layoff of 4,000 people isn't a "financial crisis," but rather a "reset of organizational culture."
By 2026, AI won't just be used for coding or customer support; in the blockchain fintech sector, it will be used for risk assessment, fraud detection, and automated compliance—tasks that previously required massive numbers of operational staff.
The fact that a "profitable" company is laying off employees because of AI will become a case study for other tech companies to follow (copycat layoffs), shifting the definition of a "healthy company" from the number of employees to "revenue per employee."
Reducing the size of excess teams will allow Dorsey to focus resources on strategic projects he's passionately interested in, such as Bitcoin mining hardware and decentralized finance (DeFi), which are key areas of blockchain in the next decade.
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Source: @jack
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