Twitter founder and Block Inc (formerly Square) CEO Jack Dorsey announced late last month that his fintech venture was making “one of the hardest decisions in the history of our company” by “reducing our organization by nearly half.”
Dorsey cited rapid improvements in AI tech as the primary reason, sending shockwaves across Wall Street. He’d previously instructed employees to embrace AI at all costs, triggering major anxiety over job security that turned out to be warranted.
The culling perfectly played into ongoing fears that AI automation is coming for white-collar jobs, a major job market and economic disruption that workers are becoming increasingly worried about — and which clearly has execs salivating.
As big tech was incurring losses over ongoing fears of an AI bubble starting to burst, Block investors sent a clear signal, sending shares of Dorsey’s company soaring following his announcement.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” Dorsey told analysts during a call, as quoted by the Wall Street Journal.
But the CEO’s boasting failed to convince everybody that the AI-triggered job apocalypse is nigh. As former employee Aaron Zamost, who was head of communications at Square from 2015 to 2020, argued in an essay published by the New York Times, there are likely a litany of other factors at play apart from AI.
“The question on minds everywhere: Is AI a terrifying new reality in which the work they do might no longer be viable?” he wrote. “Or is Block’s announcement just a convenient and flashy new cover for typical corporate downsizing?”
“The truth is, nobody knows the answer — not even Block itself,” Zamost argued.
The former head of comms wrote that Dorsey had “long placed big bets based on a read of early signals” and “show a tendency to identify patterns, see enormous growth as an inevitability and go all in with conviction.”
But whether AI really explains the company’s major downscaling instead of neatly providing a “new justification for layoffs” remains unclear at best. For one, Block had already seen major rounds of layoffs in both 2024 and 2025.
Its prior history is relevant as well. Between the end of 2019 and end of 2023, the company’s head count ballooned from 4,000 to almost 13,000 employees, per the WSJ, a major pandemic-era hiring spree.
“Look closer at specific cuts — like shrinking the policy team and eliminating diversity and inclusion roles, former colleagues told me — and Block’s latest reorganization reads like standard prioritization and cost management, not an AI-driven reinvention,” Zamost wrote.
Particularly, executives forcing their employees to adopt AI tools, often against their will, could trigger a self-fulfilling prophecy at companies claiming to be “AI first,” he argued.
“That future, however, is colliding with the reality of what AI can actually do,” Zamost wrote, pointing to AI models generating “useless email summaries, antisemitic chatbots, and AI overviews that can’t get even basic facts right.”
“Not all the roles I’ve heard that Block is eliminating can be handled by AI, yet executives are treating it as equally useful today to all disciplines,” he added.
Other analysts were equally unconvinced by Dorsey’s argument that AI had allowed him to cut almost half his company’s workforce.
“The vast majority of these cuts were probably not due to AI,” corporate investment bank Mizuho Americas’ Dan Dolev told the WSJ.
“This isn’t an AI story,” former Block employee Jason Karsh tweeted. “It’s organizational bloat wearing an AI costume.”
More on Block: Jack Dorsey Lays Off 4,000 Employees After Move to AI
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