Jack Dorsey has cut 4,000 jobs in a complete overhaul of the artificial intelligence system

Dorsey said AI-driven efficiency will require smaller teams, creating one of the biggest layoffs in the Block’s history.

Jack Dorsey announced that Block will cut its workforce by nearly half, laying off more than 4,000 employees and reducing the total number of employees from 10,000 to less than 6,000.

In a memo released publicly about X, Dorsey described the move as “one of the most difficult decisions in the company’s history” and said all employees would be notified the same day whether they were asked to leave, consult or stay.

Great work on the Block

He stated that the affected employees will receive 20 weeks of salary and one additional week per year of work, capital paid until the end of May, six months of medical coverage, their corporate devices and $5,000 to support their transition.

Employees located outside the United States will receive similar support. Details may vary depending on local requirements. Dorsey said the decision was not driven by financial difficulties, but added that the company’s business remains strong. Instead, he added,

“But something has changed. We’re already seeing that the intelligence tools we build and use, along with smaller, more agile teams, are enabling a new way of working that’s fundamentally changing what it means to build and run a company. And it’s accelerating.”

Dorsey said he considered gradually reducing staff over months or years, but chose to act immediately. He said repeated cycles of layoffs hurt morale, focus and confidence of customers and shareholders. He recognized that some decisions could go wrong and flexibility was built in to account for that while continuing to serve customers.

Dorsey admitted that they are over-hiring

The announcement of the resignation caused various reactions on social networks. Some users described the terms of the separation as generous, while others focused on concerns about artificial intelligence replacing the role of humans. One user, Will Slater, tweeted that the cuts were less about AI and more about management decisions while attending Block, which has more than tripled its workforce from 3,900 in December 2019 to 12,500 by December 2022.

He described the decline as a relief from the “overwork madness of COVID” and attributed it to management incompetence rather than technological change. In response, Dorsey admitted that he had over-hired during the pandemic.

Other users criticized the optics of referring to AI in lowercase letters in the acronym note. Some expressed concern that AI-related job cuts could become a broader trend, as the company’s share price jumped 24% in after-market hours.