Jack Dorsey laid off nearly half of Block‘s 10,000-person workforce last week, citing advances in AI coding tools as the driver — and rejected suggestions the cuts were cover for fixing an overstaffed payroll.
In an interview, Dorsey pointed to two specific developments in December as the trigger: Anthropic‘s Opus 4.6 and OpenAI‘s Codex 5.3, which he said crossed a threshold from handling new projects to working effectively on large, existing code bases. “It presented an option to dramatically change how any company is structured, and certainly ours,” he said.
The Block CEO dismissed the overhiring argument on technical grounds. According to the interview, he said the relevant benchmark is gross profit per employee, and by that measure the company was “exactly in line with or just ahead of all of our peers” during and after the pandemic hiring surge. “This was not looking at our cost and revenue per employee and fixing it,” he said, “because we were already ahead of all of our peers.”
Proactive, Not Reactive
His stated logic: waiting would have weakened the company’s hand. “If I allowed it to be drawn out, we’d be in a worse position,” he said, adding that he wanted to act from a position of strength so the severance package could be more generous than a distressed company might offer.
Employee reaction at the all-hands meeting following the announcement was mixed. One worker drew attention to the fact that Dorsey wore a hat reading “LOVE” during the session — a detail the executive addressed directly, saying he wanted to “approach the whole situation with love.” He acknowledged negative responses but said the company also received significant expressions of gratitude.
Block reported nearly $3 billion in profit last quarter and carries a market capitalization of approximately $39 billion, figures that complicate a straightforward distress narrative around the cuts.
A Signal for Other Companies
Dorsey framed the move as a preview of what other firms will face. “It’s not just about our company,” he said. “It points to a larger thing that might happen in the future for many other companies.” The implication, according to the interview, is that AI tools now allow — and perhaps require — corporate structures with far fewer employees wrapped around a layer of automated capability.
Whether that argument holds at other firms or whether Block‘s specific circumstances made the cuts easier to justify remains an open question. Dorsey did not offer a precise endpoint for the restructuring, saying only, “I don’t know what the ultimate outcome is, but I do know it’s going to have a dramatic effect.”
The Block founder — who previously co-founded Twitter, reclaimed its CEO role in 2015, and later sold the platform to Elon Musk in 2021 — has consistently moved toward technologies he views as structurally significant, from Bitcoin to decentralized protocols. The latest round of cuts follows that pattern, even if the workforce bearing the cost sees it differently.
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