We're Late, Not Early': Jack Dorsey Cuts 4,000 Jobs at Block in AI Overhaul, Stock Soars 25%

 

# 'We're Late, Not Early': Jack Dorsey Cuts 4,000 Jobs at Block in AI Overhaul, Stock Soars 25%

**Published: February 27, 2026**

You know that moment when a CEO says something that makes you do a double-take?

Jack Dorsey just had one of those moments.

The Block CEO announced Thursday that the fintech company is cutting more than 4,000 employees—roughly 40% of its 10,000-person workforce—because artificial intelligence is making them unnecessary . And here's the part that should make every white-collar worker sit up and pay attention: he doesn't think they're early to this trend. He thinks most companies are late .

Let me walk you through what just happened at Block, why the stock jumped 25% after the news, and what this means for the future of work in America .

---

## The Short Version

**What happened:** Block (the company behind Square, Cash App, and Tidal) laid off over 4,000 employees, reducing its workforce from about 10,000 to under 6,000 .

**Why it happened:** CEO Jack Dorsey explicitly cited AI as the reason. "Intelligence tools have changed what it means to build and run a company," he wrote in a letter to shareholders . "A significantly smaller team, using the tools we're building, can do more and do it better."

**The numbers:** Engineer output is up more than 40% since September thanks to AI coding tools . Block will take a $450 million to $500 million hit for severance and benefits . The stock jumped over 24% in after-hours trading .

**The warning:** Dorsey says most companies are "late" to this realization and predicts the majority will make similar structural changes within the next year .

**The paradox:** While cutting thousands of roles, Block is actively hiring senior AI engineers . The company is becoming smaller, flatter, and AI-native.

---

## The Announcement: What Jack Dorsey Actually Said

Let's start with Dorsey's own words, because they're worth reading carefully.

In a letter to shareholders, he wrote: "The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week" .

On X (the platform he co-founded), he added: "today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are…" .

**The timing:** Dorsey pointed to a specific inflection point. "Something happened in December of last year, just last year, where the models just got an order of magnitude more capable and more intelligent, and it's really shown a path forward in terms of us being able to apply it to nearly every single thing that we do," he said on an analyst call .

**The warning to other companies:** "I don't think we're early to this realization," Dorsey said. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively" .

---

## The Numbers: What We Know About the Layoffs

Let's get specific about the scale of what just happened.

**Table 1: Block Layoffs by the Numbers**

| **Metric** | **Value** |

| :--- | :--- |

| Employees before cuts | 10,205 (as of Dec 31, 2025)  |

| Employees after cuts | Under 6,000  |

| Jobs eliminated | 4,000+ (about 40%)  |

| Severance cost | $450 million - $500 million  |

| Stock reaction | +24% to +27% after-hours  |

| Market cap | ~$31 billion  |

*Sources: *

**The productivity gains:** CFO Amrita Ahuja said that since September, **engineer output is up more than 40%** thanks to AI tools . Work that used to take weeks now takes a fraction of the time.

**The severance package:** Laid-off employees are getting:

- 20 weeks of base salary

- One additional week for each year of service

- Equity vested through the end of May

- Six months of healthcare coverage

- $5,000 in transition assistance 

**Why now, not gradual cuts:** Dorsey said he chose to do one deep round instead of cutting gradually over months or years. "I'd rather get there honestly and on our own terms than be forced into it reactively" .

---

## The AI Tools Behind the Cuts

So what exactly is making these workers unnecessary?

**Goose:** Block has been building its own internal AI tool called Goose, which speeds up coding and other repetitive work . But Dorsey said external tools have actually surpassed Goose's capabilities.

**The December leap:** "Something happened in December last year where the models just got an order of magnitude more capable and more intelligent," Dorsey said . That's a reference to advances in models like Anthropic's Claude and OpenAI's systems.

**What AI is doing:**

- Automating routine coding tasks

- Generating and testing code

- Speeding up engineering workflows

- Handling repetitive work across the company

**The result:** Ahuja said engineering work that would have taken weeks now takes a fraction of the time. Output per engineer is up more than 40% since September .

---

## The Stock Market Reaction: Investors Love Efficiency

Here's the part that might make you uncomfortable: the stock jumped 25%.

**Table 2: Block Stock Reaction**

| **Time** | **Price** | **Change** |

| :--- | :--- | :--- |

| Thursday close | $54.53 | +5%  |

| After-hours | ~$68 | +25%  |

| Premarket Friday | Holding gains | +20%+  |

*Sources: *

**Why investors cheered:** Because the math is simple. Block's gross profit grew 24% in Q4, driven by 33% growth in Cash App . If they can deliver that growth with 40% fewer people, margins explode.

**Stephen Innes** at SPI Asset Management put it bluntly: "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company" .

**The Citrini factor:** This week's viral Citrini Research report, which modeled an AI-driven economic downturn, made investors hyper-aware of AI's potential impact. Block's announcement landed right in that sweet spot—concrete proof that AI is already reshaping corporate structure .

---

## The Paradox: Hiring While Firing

Here's where it gets interesting.

Block is cutting thousands of workers, but they're actively hiring in one area: **senior AI engineering talent** .

**What they're looking for:**

- Engineers who can build and improve AI systems

- People who can work alongside the new tools

- Talent to help Block become "intelligence-native"

**The quote from Ahuja:** "Although Block is shedding over 4,000 people from its 10,000-strong workforce, it's expanding in one area: senior engineering talent focused on AI" .

This is the new reality. Companies don't just need fewer people. They need different people. People who can build, manage, and work alongside AI systems, not just do the work those systems can now handle.

---

## The Broader Context: AI Job Displacement Is Real

Block isn't alone. This is happening across tech.

### What Other Companies Are Doing

**Table 3: AI-Related Workforce Changes at Major Tech Companies**

| **Company** | **Recent Action** | **AI Context** |

| :--- | :--- | :--- |

| Amazon | Looking for cost reductions | Ramping AI spending  |

| Meta | Preparing for AI-driven changes | Zuckerberg expects 2026 to be the year AI changes how we work  |

| Microsoft | Ongoing restructuring | Shifting focus to AI investments  |

| Google | Workforce adjustments | AI tools changing roles  |

| Cognizant | 30% of code now AI-generated | Still hiring thousands of graduates  |

*Sources: *

**Zuckerberg's prediction:** "We're starting to see projects that used to take big teams now be accomplished by a single, very talented person" .

**The Cognizant example:** The IT services firm now generates about 30% of its code using AI, yet still expects to hire thousands of graduates . That's the paradox—AI doesn't eliminate work entirely, but it changes what workers do.

### The Numbers on AI Job Loss

Goldman Sachs estimates AI contributed to **5,000 to 10,000 monthly job losses** in the most exposed industries last year, accounting for about 7% of planned layoffs in January .

**The IMF warning:** The International Monetary Fund has found that employment levels are already lower in occupations exposed to AI, especially entry-level roles .

**The WEF forecast:** Despite the anxiety, the World Economic Forum estimates that **170 million new roles** could be created globally by 2030, even as 92 million jobs disappear, resulting in a net gain—if workers gain the right skills .

---

## The Citrini Connection: Why This Week Mattered

Block's announcement landed in a uniquely charged moment.

Earlier this week, a research firm called Citrini published a 7,000-word "thought experiment" imagining a 2028 scenario where AI agents have disrupted the economy, causing a 38% drop in the S&P 500 and 10% unemployment .

The report went viral. Markets reacted. The Dow dropped 800 points on Monday .

**Why it matters for Block:** The Citrini scenario specifically modeled AI agents rerouting payments away from card networks and onto cheaper stablecoin rails—hitting payment companies like Block directly .

Dorsey's announcement essentially confirmed that the disruption isn't coming in 2028. It's here now. And his company is adapting.

**Moneycontrol** noted: "For Block, which straddles both payments and fintech, the Citrini scenario lands close to home. Dorsey's bet is that building AI tools internally — rather than being disrupted by them — can sustain a leaner company" .

---

## What This Means for You

### If You're a Tech Worker

This is the wake-up call. Block just proved that AI displacement isn't theoretical—it's happening, at scale, at a profitable company.

The skills that matter are shifting. Routine coding, data processing, and repetitive knowledge work are being automated. The value is moving to people who can build, manage, and work alongside AI systems.

**The good news:** Companies are still hiring—but they're hiring different people. Cognizant generates 30% of its code with AI and still plans to hire thousands of graduates . Block is cutting thousands but actively recruiting senior AI engineers.

### If You're in Fintech

This is your future. Block's move signals that AI efficiency gains are now a competitive necessity. If your company isn't thinking about how to do more with fewer people, it's falling behind.

**The warning from Dorsey:** "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes" .

### If You're an Investor

Block's 25% stock jump tells you everything. Wall Street rewards companies that get ahead of this trend. The companies that wait will be forced into reactive cuts later, under worse conditions.

**The Evercore ISI note:** The layoffs represent "a seminal moment" in the AI era, offering a glimpse into how the technology may fundamentally reshape the corporate world .

### If You're a Consumer

Your Cash App and Square experiences probably won't change—at least not immediately. But over time, expect faster development, better features, and maybe even lower costs as AI efficiencies kick in.

---

## The Bigger Question: Is This Just the Beginning?

Dorsey seems to think so.

"I don't think we're early to this realization. I think most companies are late" .

**What that means:** If Dorsey is right, we're about to see a wave of similar announcements. Companies across every industry will realize they can do the same work with far fewer people, thanks to AI.

**The economic implications:** This could mean:

- Higher corporate profits (good for investors)

- Lower employment (bad for workers)

- Massive retraining needs

- Potential social and political upheaval

**The productivity upside:** If AI delivers on its promise, we could see a sustained productivity boom. That's good for economic growth. The question is whether the gains are shared broadly or concentrated at the top.

---

## Frequently Asked Questions

**Q: How many people did Block lay off?**

A: More than 4,000 employees, reducing the workforce from about 10,200 to under 6,000—roughly a 40% reduction .

**Q: Why did Block do this?**

A: CEO Jack Dorsey explicitly cited AI efficiency gains. He said intelligence tools allow smaller teams to do more work, and the capabilities are "compounding faster every week" .

**Q: How did the stock react?**

A: Block shares jumped 24% to 27% in after-hours trading following the announcement .

**Q: What severance are laid-off workers getting?**

A: 20 weeks of salary plus one week per year of service, equity vested through May, six months of healthcare, and $5,000 in transition assistance .

**Q: Is Block still hiring?**

A: Yes, but only in specific areas. The company is actively recruiting senior AI engineering talent .

**Q: What's Goose?**

A: Goose is Block's internal AI tool for speeding up coding and other repetitive work. Dorsey said external models have now surpassed Goose's capabilities .

**Q: What happened in December 2025?**

A: According to Dorsey, AI models "got an order of magnitude more capable and more intelligent" in December, accelerating Block's transition .

**Q: Are other companies doing this?**

A: Yes. Meta, Microsoft, Google, and Amazon have all made AI-related workforce changes. Cognizant now generates 30% of its code with AI .

**Q: Will this affect Cash App or Square users?**

A: Not immediately. The changes are internal. Over time, you may see faster development and new features.

**Q: Is this the future of work?**

A: Dorsey thinks so. He predicts "the majority of companies will reach the same conclusion and make similar structural changes" within the next year .

---

## The Bottom Line

Here's what I keep coming back to.

For years, we've debated whether AI would actually eliminate jobs. Economists gave cautious estimates. Tech executives made vague promises. Workers worried but didn't see concrete proof.

Block just provided the proof.

4,000 people. 40% of the workforce. Gone because AI makes them unnecessary. And the stock went up 25%.

**Jack Dorsey's message** is worth remembering: "I don't think we're early to this realization. I think most companies are late."

If he's right, this is the first domino. The next year will bring similar announcements from companies across every industry. Some will be honest about the AI link, as Block was. Others will find different words.

**The paradox** is that Block is also hiring. They need different people now—people who can build and manage AI systems, not just do the work those systems can now handle.

That's the real story. AI isn't eliminating work entirely. It's eliminating certain kinds of work, and certain kinds of workers. The question for everyone reading this is: which kind are you?

**Stephen Innes** put it perfectly: "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company."

Block is the case study. The rest of corporate America is taking notes.

---

*Got thoughts on the Block layoffs? Worried about your job? Working with AI tools already? Drop a comment and let me know.*