Startling claim: AI could handle 40% of your job, and Block’s Jack Dorsey says the idea is already reshaping how his company operates. He attributes a portion of Block’s drastic workforce reduction to advances in artificial intelligence, while acknowledging other pressures like a sluggish crypto market, overstaffing, and a sliding stock price. Last week, Block announced it would cut about 4,000 of its 10,000 employees. In a shareholder letter, Dorsey stated that AI progress “has changed what it means to build and run a company.” He added that internally they are already seeing outcomes: a much smaller team using the company’s own tools can accomplish more, with intelligence capabilities improving each week. He stressed that the cuts aren’t an austerity measure and that Block’s business remains solid.
Could AI truly run 40% of a business? It’s possible in theory, but Block’s situation shows there are other forces at play.
Dorsey’s long-running focus on cryptocurrency has shaped Block for years. Rebranding from Square to Block in 2021 emphasized blockchain and Bitcoin, alongside the Cash App. In 2024, Block announced it would dedicate 10% of its bitcoin-product gross profit to purchasing more Bitcoin.
Beyond AI, Block faces challenges tied to its crypto bets. Public financial data suggest Block holds roughly 8,500 BTC. Bitcoin has fallen significantly this year, mirroring broad crypto market weakness. Pre-announcement, Block’s stock had dropped about 35% from a prior high.
These factors—cryptocurrency headwinds and weak equity performance—offer a pragmatic explanation for the layoff move. The immediate market reaction was favorable: Block’s stock jumped about 20% in the days after the announcement.
Layoffs in tech often produce mixed market responses. For instance, Amazon announced large-scale cuts (14,000 in 2025, then 16,000 in 2026) around earnings calls; pricing fluctuated as investors weighed costs, datacenters, and automation implications. Salesforce also cut 4,000 customer-support roles, citing AI could handle about half of those interactions, yet its stock responded unfavorably to broader software-sector disruption concerns. Goldman Sachs has noted that companies announcing restructuring tied to automation often underperform the market.
A former Block executive criticized the company’s prior growth—describing a period of “bloated headcount” that began around 2020 and was only partially corrected by 2024. Dorsey contends Block had already addressed overhiring issues, insisting the latest cuts aren’t related to overstaffing.
Looking ahead, the way Block reorganizes after these reductions will shed light on AI’s actual capacity to substitute human labor. Many U.S. leaders now expect greater productivity gains from AI, particularly for software engineers whose workflows can be augmented or automated by coding models. Yet early evidence from Harvard Business Review and other studies suggests AI often raises workload and intensity rather than simply cutting headcount. A recent Harvard study of a 200-person tech firm found that AI tools tended to heighten workload rather than reduce it. Block’s remaining workforce may face a similar pattern as AI adoption accelerates.
