Twitter founder and Block Inc. (formerly Square) CEO Jack Dorsey announced late last month that his fintech venture was making “one of the toughest decisions in the history of our company” by “reducing our organization by nearly half.”
Dorsey cited the rapid improvement in AI technology as the primary reason, causing panic on Wall Street. He had earlier instructed employees to adopt AI at all costs, which had created huge concerns about job security, which proved to be correct.
This wipeout is based entirely on fears that AI automation is coming to white-collar jobs, a major job market and economic disruption that workers are increasingly worried about — and which is clearly troubling executives.
As big tech was suffering losses due to fears of the AI bubble bursting, Block investors sent a clear signal, causing shares of Dorsey’s company to surge after his announcement.
“Within the next year, I believe most companies will come to the same conclusion and make similar structural changes,” Dorsey told analysts during a call. quoted by wall street journal.
But the CEO’s arrogance failed to convince everyone that an AI-triggered job apocalypse is imminent. As former employee Aaron Zamost, who was head of communications at Square from 2015 to 2020, argued in a essay published by new York TimesMany other factors besides AI are also likely at play.
“The question on everyone’s mind is: Is AI a terrible new reality in which the jobs they do will no longer be viable?” He has written. “Or is Block’s announcement a convenient and attractive new cover for typical corporate downsizing?”
Zamost argued, “The truth is that no one knows the answer – not even Blok himself.”
The former head of Bloomberg wrote that Dorsey had “made big long bets based on reading early signals” and “showed a tendency to identify patterns, see massive growth as an inevitability, and move forward with conviction.”
But whether AI actually explains the company’s major decline rather than providing “new justification for layoffs” is still unclear. For one, the bloc had already seen big rounds of layoffs in both 2024 and 2025.
Its previous history is also relevant. Between the end of 2019 and the end of 2023, the company’s workforce is expected to grow from 4,000 to approximately 13,000 employees. WSJA major pandemic-era hiring spree.
“Take a closer look at the specific cuts — like shrinking the policy team and eliminating diversity and inclusion roles, former colleagues told me — and Block’s latest restructuring reads like standard prioritization and cost management, not AI-driven reinvention,” Zamost wrote.
In particular, executives often force their employees to adopt AI tools against their will, which could trigger a self-fulfilling prophecy in 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, “useless email summaries, anti-Semitic chatbots and AI observations that can’t even get basic facts right.”
“I’ve heard that not all of the roles the block is eliminating can be handled by AI, yet executives today consider it equally useful for all disciplines,” he said.
Other analysts equally disagreed with Dorsey’s contention that AI allowed him to cut his company’s headcount by nearly half.
“Most of these reductions were probably not due to AI,” said Dan Dolev of corporate investment bank Mizuho America. WSJ.
“This is not an AI story,” former Block employee Jason Karsh Tweeted. “It’s organizational bloat dressed in AI attire.”
More on the block: Jack Dorsey fired 4,000 employees after moving into AI
