Jack Dorsey Laid Off 4,000 People and Called It “The Future”

We’re ending the week on a sobering note.

Not because a company imploded. Not because revenue collapsed or some rogue division torched the balance sheet. But because a thriving, profitable fintech company decided it simply needs far fewer humans to operate in the age of AI.

Last night, Jack Dorsey announced that Block is cutting nearly half its workforce, shrinking from more than 10,000 employees to just under 6,000. That means over 4,000 people are either being asked to leave or “entering consultation,” which is corporate phrasing that manages to sound both polite and vaguely medical.

What makes this announcement especially bracing is that Dorsey is explicit: this is not a company in trouble. Gross profit is growing. Customer count is growing. Profitability is improving. The business is strong.

And yet, nearly half the people are gone.

That tension—between strength and subtraction—is the real story.

“We’re Not in Trouble. We’re Just Replacing You.”

Dorsey writes that the layoffs are not driven by financial distress. Instead, “something has changed.” The change, he explains, is that intelligence tools—AI systems built internally and used across the company—paired with smaller, flatter teams, are enabling a fundamentally new way of working.

In other words, the software is getting good enough that the humans are becoming optional.

There’s a strange elegance to the argument. If AI allows fewer people to produce the same output—or more—then maintaining a larger workforce could look inefficient. From a purely operational standpoint, it makes sense. Technology improves, productivity rises, headcount falls. This is how industrial revolutions work.

But it hits differently when the company making this call is not fighting for survival. If anything, the usual playbook in a period of growth and rising profits is to invest aggressively. Hire talent. Expand into adjacent markets. Launch experimental products. Try ten things so that three succeed spectacularly. Growth is supposed to create opportunity.

Instead, Block’s version of progress is contraction.

Dorsey frames the choice as binary: either cut gradually over months or years, allowing morale to erode in slow motion, or act decisively now and reset from a position of conviction. He chose the latter. Repeated rounds of layoffs, he argues, destroy trust and focus. Better to take one hard swing than many small ones.

It’s a clean argument. It’s also incomplete.

Because the choice wasn’t simply between slow cuts and fast cuts. There was another path, one less tidy but arguably more ambitious: keep the workforce and ask what 10,000 people, armed with powerful AI tools, might be able to build next.

The Severance Is Generous. The Philosophy Is Stark.

To Dorsey’s credit, the severance package is substantial. Affected employees receive 20 weeks of salary plus an additional week per year of tenure, equity vested through the end of May, six months of health care, their corporate devices, and $5,000 in transition support. Communication channels will remain open for a few days so people can say goodbye. There will be a live video session to thank everyone.

It is, by tech industry standards, humane.

But the generosity of the exit package doesn’t soften the philosophical shift underlying the decision. This wasn’t framed as “we must reduce costs to survive.” It was framed as “we can operate more effectively with fewer people because intelligence tools change what it means to build and run a company.”

That is a different kind of corporate logic. It signals that headcount is no longer tightly correlated with success. A growing business no longer implies a growing workforce. Efficiency gains are not being reinvested into expansion; they are being converted into a leaner organization.

And that’s where this becomes more than just a Block story.

“A Smaller Company Gives Us the Space to Grow”

One of the more striking lines in the letter is Dorsey’s claim that a smaller company gives Block “the space to grow the business the right way, on our own terms.” It’s a subtle but powerful reframing: reduction as liberation.

The idea is that a leaner organization is more focused, less bureaucratic, more decisive. That may well be true. Smaller teams often move faster. Flatter structures can reduce friction. AI can automate repetitive work, draft code, analyze data, and compress timelines that once required entire departments.

But there’s another interpretation. A smaller company can also mean fewer perspectives, fewer experiments, and less slack for creative risk. Innovation has historically thrived not only on efficiency but on abundance—the willingness to fund ideas that might fail.

If AI increases productivity per person, that productivity could be directed toward new products, lower prices for customers, global expansion, or ambitious bets in emerging markets. Instead, it appears to be directed toward margin improvement and structural simplification.

That is a choice. A rational one, perhaps. But still a choice.

The Awkward Humanity of It All

Dorsey emphasizes that the company won’t simply “disappear people from Slack and email.” Channels will stay open so colleagues can say goodbye properly. He acknowledges the awkwardness of handling layoffs in a highly connected digital workplace and states he would rather it feel human than efficient and cold.

There is something sincere in that sentiment. Layoffs handled clinically, with instant access revocation and silence, have left scars across the tech industry. Acknowledging the humanity of departing employees matters.

But there is also an irony that’s hard to ignore. The decision itself is justified in the language of intelligence, optimization, and structural efficiency. The farewell, meanwhile, is framed as deliberately awkward and human. It’s as though the machines are ascendant, and the humans are invited to linger briefly before exiting the stage.

The Broader Signal

What makes this letter unsettling isn’t just the scale of the cuts. It’s the precedent it sets.

A strong company is reducing its workforce dramatically because AI enables it to do more with less. That message will not go unnoticed in other boardrooms. If the model holds—if markets reward companies for converting intelligence tools into lower headcount—then layoffs may increasingly accompany good earnings, not bad ones.

Historically, job cuts were a sign of trouble. In this emerging paradigm, they may become a sign of technological maturity.

And that’s the sobering part.

You can respect Dorsey’s decisiveness and transparency. You can even admire the clarity of the strategic thesis. But it’s fair to ask whether growth in the AI era must always mean fewer people, or whether it could mean more ambitious uses of the leverage AI provides.

If thriving companies conclude that the optimal number of humans is always smaller tomorrow than today, then “business is strong” stops being reassuring. It becomes a warning.

And that may be the real story of this phase of AI.