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- Jack Dorsey announced major layoffs at Block, cutting nearly half of its workforce.
- Dorsey said AI was behind the cuts, and the company’s stock rose over 20% in after-hours trading.
- Tech and VC leaders have reacted to Block’s layoffs, with some calling it a sign of what’s to come.
Jack Dorsey’s announcement on Thursday that Block was slashing its workforce nearly in half sent shockwaves through the tech world.
Dorsey, Block’s CEO and cofounder, said AI was rapidly changing work at the financial services company, which owns Square, Cash App, and Afterpay.
“A significantly smaller team using the tools we’re building can do more and do it better,” he said on Thursday’s earnings call, shortly after the reduction in force was shared on X.
“I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now,” he wrote in a memo. “I chose the latter.”
Block’s stock was up over 20% in after-hours trading following the announcement. Shares were down more than 16% in the last year as of market close on Thursday.
Leaders in tech and venture capital quickly reacted to the news, with some saying it could be the first of what’s to come as AI fundamentally transforms companies and the nature of work. Others were more skeptical of AI’s role.
Here’s what smart people are saying about the job cuts at Block.
Balaji Srinivasan
“This is the first AI cut,” tech investor Balaji Srinivasan said on X. “And it will send shockwaves.”
The Silicon Valley venture capitalist said the Block cuts were a “signal to everyone in tech: get good now. Become indispensable. Work nights and weekends. Learn the AI tools and raise your game. Or you might not make the cut, as an employee or as a company.”
Aakash Gupta
“Block is the canary in the coal mine,” Aakash Gupta, host of “The Growth Podcast,” said on X. “And they’re not alone.”
Gupta said Dorsey “said the quiet part out loud: intelligence tools paired with smaller teams have already changed what it means to run a company.”
“Block went from 10,000 to 6,000 while growing revenue and raising guidance. Every CEO running a company with more than a few thousand employees is doing this math tonight,” he added. “The canary just stopped singing.”
Ben Carlson
Ben Carlson, a financial analyst and director at Ritholtz Wealth Management, expressed skepticism that the cuts were purely driven by AI innovation, sharing a chart that shows Block’s share price is down sharply from its high point in 2021.
“Maybe Block laying off a ton of employees is a sign that AI is gonna destroy everything,” he wrote on X. “Or maybe the stock is down 80% from the highs and they overhired and AI is a convenient excuse.”
Jason Calacanis
Jason Calacanis, angel investor and co-host of the “All-In” podcast, praised Dorsey for the cuts.
“Leadership is hard, but this feels like (another) visionary move,” he said on X. “Have never sold a share, since being a private investor in square.”
Jessica Verrilli
“Feels inevitable this is about to ripple through every public company,” Jessica Verrilli, cofounder of VC firm Adverb Ventures, said on X. “We’ve gotta find a way to make everyone an owner w/ some exposure to the upside as the # of employees falls off a cliff.”
Shaun Maguire
“Respect to @jack for doing the hard thing,” Shaun Maguire, partner at Sequoia Capital, wrote on X. “While doing it intentionally and owning the decision.”
Clara Shih
“Square is just the beginning,” Clara Shih, a startup investor and senior advisor at Meta, said in an X post. “Every CEO faces the same decision today that manufacturing CEOs did in 2000: do a big layoff or your competitor will, pass on cost savings to customers and investors, and beat you.”
“In 2000, jobs were lost to Shenzhen. In 2026, jobs will be lost to AI,” she added.
Matt Shumer
Matt Shumer, an AI CEO who wrote the viral “Something Big is Happening” essay earlier this month, said this is “one of the first major examples of AI driving layoffs, but certainly not the last.”
“If you’re saying ‘this won’t happen to me’, re-evaluate your thoughts. Now,” he said on X. “It may be the most important thing you do.”
