Block CEO Jack Dorsey Lays Off 40% of Workforce, Cites AI Transformation

Summary

Block CEO Jack Dorsey has laid off approximately 40% of the company's workforce—roughly 4,000 employees—in a move he says is driven by rapid advances in AI technology rather than cost-cutting. In an exclusive interview with WIRED, Dorsey defended the decision, stating that AI tools from companies like Anthropic and OpenAI have reached a level of sophistication that requires fundamentally restructuring how companies operate. He emphasized that Block's gross profit per employee was already ahead of or in line with peers, and that the layoffs were a proactive step to rebuild the company "as an intelligence" rather than a reactive cost measure.

Dorsey pointed to breakthroughs in December 2025 with Anthropic's Opus 4.6 and OpenAI's Codex 5.3 as catalysts for his decision, claiming these tools shifted from handling greenfield projects to managing complex, existing systems. He argued that other companies will soon follow suit as AI capabilities continue to advance. The CEO attempted to frame the mass layoffs as compassionate, offering what he described as generous severance packages and conducting the restructuring "from a position of strength" while Block remains profitable.

The layoffs sparked controversy among employees and observers, with some questioning whether Dorsey was using AI as cover for traditional workforce reductions—a practice critics have termed "AI-washing." Despite employee pushback during an all-hands meeting following the announcement, Dorsey maintained that the move positions Block to stay ahead of technological trends. The company, formerly known as Square, reported nearly $3 billion in profit last quarter and maintains a $39 billion market cap.

• Dorsey predicts other companies will follow with similar AI-driven restructuring and workforce reductions