A significant 50% workforce reduction by this company contributes to a growing trend of AI-attributed job cuts in the technology sector, impacting even highly profitable businesses. Predictions suggest these automation-driven job losses could be permanent and more extensive than those seen during the Great Recession.
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</div>Jack Dorsey’s payments and financial services firm, Block, is eliminating over 4,000 positions, which accounts for nearly 50% of its staff. Dorsey explained in a shareholder letter that this decision stems from AI tools enabling a more streamlined and strategically advantageous organizational structure.
These layoffs will decrease Block’s employee count from more than 10,000 to under 6,000. It’s important to note that the company isn’t implementing these reductions due to financial struggles. Block reported a gross profit of $10.36 billion for fiscal year 2025, marking a 17% increase from the previous year, and has elevated its 2026 gross profit forecast to $12.20 billion. During its Q4 2025 earnings call, the company also announced a 24% rise in gross profit for that quarter alone.
Dorsey stated in the letter that “Intelligence tools have transformed the approach to establishing and managing a business.” He elaborated, “A considerably smaller team, utilizing the tools we are developing, can achieve greater output and superior quality. Furthermore, the capabilities of intelligence tools are rapidly advancing week by week.”
He further shared a foresight that enterprise leaders would find challenging to disregard: “I anticipate that, within the coming year, most companies will arrive at this identical conclusion and implement comparable organizational shifts. My preference is for us to achieve this proactively and authentically, rather than being compelled to respond defensively.”
Block is not the first — and it won’t be the last
Block’s situation is not unique. Earlier this week, WiseTech Global, the Australian logistics software firm known for its CargoWise platform, reduced its workforce by approximately 2,000 positions, attributing the cuts to similar efficiency enhancements from AI. Like Block, WiseTech was financially robust at the time. Other major companies, such as Amazon, Microsoft, Workday, and Salesforce, have also referenced AI as a reason for recent staff reductions.
In a similar vein, on Thursday, data analysis provider C3 AI cut 26% of its employees, with its CEO partially crediting agentic efficiencies for the decision.
The upcoming level of disruption is substantial. A January forecast from Forrester projects that by 2030, AI and automation will eliminate 6.1% of jobs in the US, totaling 10.4 million roles. For comparison, the US experienced a loss of 8.7 million jobs during the Great Recession. Forrester highlights that, unlike losses caused by recessions, AI-induced job displacement is fundamental and enduring. Significantly, generative AI now contributes to 50% of anticipated US job losses due to automation, an increase from 29% in Forrester’s previous outlook, as agentic AI solutions intensify this impact.
However, Forrester includes a crucial warning. The firm noted that in nine out of ten instances where a CEO attributes workforce reductions to AI, the company typically lacks a fully developed and thoroughly tested AI application ready to assume those responsibilities.
Restructuring from strength, not distress
Sanchit Vir Gogia, chief analyst at Greyhound Research, stated that the significance of Block’s layoffs lies in their context. He emphasized, “This isn’t merely about cutting unnecessary expenses; it’s about fundamentally reshaping core competencies.” He continued, “When a financially stable company opts to eliminate almost half its staff and explicitly links this decision to AI capabilities, it signifies a strategic repositioning rather than a reactive measure.”
Gogia highlighted a distinct difference compared to earlier restructuring phases. He explained, “Historically, layoffs came after periods of vulnerability. This time, the sequence is inverted. Reducing staff while in a strong position indicates confidence—it communicates that leadership believes delaying action would pose a greater risk than acting promptly.”
Regarding Dorsey’s forecast that most organizations will adopt similar changes within a year, Gogia, however, expressed reservations. He asserted, “While the underlying structural change is genuine, a synchronized one-year wave of adoption is unlikely.” He contended that factors such as stringent regulations, existing labor structures, the complexities of integrating legacy systems, and varying levels of governance maturity would impede rapid adoption in highly regulated industries like financial services, healthcare, and public infrastructure. He concluded, “Forecasting widespread twelve-month adoption overlooks the inherent institutional resistance.”
Speed without architecture is a risk, not a strategy
For technology leaders, the consequences extend beyond just staff numbers. Gogia cautioned that rapid implementation without a structured architectural approach introduces hazards. He stated, “Rapid workforce reduction coupled with a failure to re-engineer escalation processes leads to fragile systems, vulnerabilities of which become apparent only under pressure.”
He further advised that workforce planning should evolve beyond simple job titles. He elaborated, “Planning needs to focus on task groupings, pinpointing which cognitive processes can be automated and which must remain human-dependent due to requirements for escalation authority or regulatory compliance.”
Dorsey characterized Block’s future as transforming into a “more compact, agile, and intelligence-centric company.” Gogia’s perspective provides valuable insight for enterprise leaders analyzing this message: he remarked that the organizations successfully managing this shift “will not be those that implement cuts most rapidly. Instead, they will be those that undertake a thoughtful and intentional redesign.”
