Last week, Block CEO and ayahuasca enthusiast Jack Dorsey announced that he was cutting 40% of his company\u2019s staff because AI tools have reduced the company\u2019s need for people. While Dorsey called it \u201cone of the hardest decisions in the history of our company,\u201d he also said it was inevitable\u2014that the cuts could either happen slowly over the next few years or all at once, right now. Basically, AI was coming for those jobs one way or another.<\/p>\n
It turns out things might not be that simple.<\/p>\n
Naoko Takeda, a data scientist at Block, poked a pretty significant hole in Dorsey\u2019s story. She left Block, not because she was laid off, but because of how she was asked to stay. According to Takeda<\/a>, she was offered a 75% pay increase, which she said was 90% with a one-time bonus included, to stay on and work with the skeleton crew that was left behind following Dorsey\u2019s sudden downsizing.<\/p>\n \u201cSo basically, I saw my company discard half of my peers and double my pay,\u201d she wrote on LinkedIn<\/a>. \u201cThat\u2019s not an honor. It feels shameful and dehumanizing. I\u2019d rather see my peers keep their jobs than personally profit from their trauma.\u201d<\/p>\n Takeda said she wasn\u2019t sure what the retention package looked like for the rest of the company\u2019s remaining employees, but if it was similar to the offer she received, it seems like Block isn\u2019t going to save a whole lot on payroll. Instead, it\u2019s just shifting that money around to people who will presumably be asked to pick up the slack left by the sudden, sizable hole in the company\u2019s staff. And, as Takeda pointed out, those who took the payday are basically just enjoying a fatter check until their day under the ax comes, because Dorsey has effectively signaled that it is inevitable.<\/p>\n A second blow to Dorsey\u2019s narrative came from Aaron Zamost, the head of communications for Dorsey\u2019s company from 2015 to 2020. In an op-ed in the New York Times, he suggested that Block\u2019s layoffs are more about Dorsey trying to \u201cprove [his] A.I. credentials\u201d<\/a> to others than a true signal that AI is currently doing the work of 4,000 people.<\/p>\n \u201cLook closer at specific cuts \u2014 like shrinking the policy team and eliminating diversity and inclusion roles, former colleagues told me \u2014 and Block\u2019s latest reorganization reads like standard prioritization and cost management, not an A.I.-driven reinvention,\u201d Zamost wrote.<\/p>\n There\u2019s no doubt that we\u2019re in an age of AI washing, and that chalking up layoffs to AI adoption is one surefire way to please your shareholders, whether it\u2019s true or not. OpenAI CEO Sam Altman recently warned<\/a> that he believes some companies are using AI as an excuse for cutting staff, and there is data to back up that idea. Last year,\u00a0less than 1% of all job losses<\/a> for the year were attributed to AI, and a recent paper published by the National Bureau of Economic Research<\/a>\u00a0found that 90% of executives surveyed said AI has had no impact on workplace employment in the last three years.<\/p>\n Of course, there\u2019s always the possibility that Dorsey is the exception. He\u2019d certainly like for that to be the case\u2014or at least like for investors to believe it to be. Wired asked Dorsey<\/a> straight up if the recent layoffs were AI washing, and Dorsey gave a pretty wishy-washy response, stating that AI tools are \u201cpresenting a future that entirely changes how a company is structured,\u201d while calling the layoffs \u201cproactive.\u201d<\/p>\n He even pinpointed when this pivot became possible, telling Wired, \u201cSomething really shifted in December in the sophistication of [AI] tools. Anthropic\u2019s Opus 4.6 and OpenAI\u2019s Codex 5.3 went from being really good at greenfield products to being really good at larger and larger code bases. It presented an option to dramatically change how any company is structured, and certainly ours.\u201d<\/p>\n Later, though, when asked if he had overhired, Dorsey said<\/a>, \u201cThis was not looking at our cost and revenue per employee and fixing it, because we were already ahead of all of our peers. This was looking deeply at what the tools can do now and our own application of them.\u201d Maybe Dorsey is just saying that he\u2019s looking at what AI can do now and extrapolating from there, but these seem like two different answers. It also seems to minimize his own admission on Twitter<\/a> that his company \u201cover-hired during Covid.\u201d<\/p>\n Block has undergone three<\/a> rounds<\/a> of layoffs since 2024, prior to this one, including a rolling layoff<\/a> that just started in February that saw 10% of the company\u2019s staff cut. Per a Wired report<\/a> on those layoffs, Dorsey claimed they were being made for performance reasons, and there was \u201ca sizable portion of our population that have been phoning it in.\u201d AI seemingly wasn\u2019t mentioned as a reason for those cuts, despite the fact that the same tools that Dorsey credits with making the latest layoff possible were already available.<\/p>\n Still, something certainly must have changed. To go from doing a rolling layoff of 10% of staff to an immediate cut of 40% is pretty drastic. And so, too, is Dorsey\u2019s roadmap for the future of his company. \u201cI want the company itself to feel like a mini AGI,\u201d he told Wired<\/a>. \u201cWe\u2019re moving to a world where our customers will have the ability to create their own products, experiences, and customizations.\u201d<\/p>\n Maybe Dorsey\u2019s hunch is right. But a world where customers are basically vibe-coding their own products on top of Block sure seems like the kind of world where you\u2019re going to need a lot of customer support staff to navigate all the errors, issues, and security vulnerabilities that arise. If that happens, Dorsey will probably rest easy knowing he\u2019s not the only CEO who cut staff just to realize that people are actually good at their jobs<\/a>. And just as he\u2019s receiving plenty of praise now for being so future-forward and visionary in his adoption of AI, he\u2019ll probably get praise for recognizing the need for a human-centric approach upon course-correcting. Some guys just can\u2019t lose.<\/p>\n","protected":false},"excerpt":{"rendered":"Last week, Block CEO and ayahuasca enthusiast Jack Dorsey announced that he was cutting 40% of his company\u2019s…\n","protected":false},"author":3,"featured_media":637815,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[691,738,7611,42169,15876,158,67,132,68],"class_list":{"0":"post-637814","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-block","11":"tag-jack-dorsey","12":"tag-layoffs","13":"tag-technology","14":"tag-united-states","15":"tag-unitedstates","16":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116185847889658093","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/637814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=637814"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/637814\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/637815"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=637814"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=637814"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=637814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}