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Tech company Block, the parent company of payment services Square and Cash App, has announced it will lay off about 40% of its employees due to advances in artificial intelligence. But some in the tech industry aren’t convinced.
in letter Block CEO Jack Dorsey said in a post on social media platform X on Thursday that the decision was made not because the company is in any trouble, but because AI tools can do more.
“We’re already seeing the intelligence tools we create and use, combined with smaller, flatter teams, enable new ways of working that fundamentally change what it means to start and run a company,” the Twitter founder and CEO wrote.
Dorsey added that they could have cut jobs slowly or all at once and “take an honest look at where we are and act now.”
“I chose the latter,” he said, adding that he would host a live video call to thank Brock’s employees.
After the announcement, Block’s stock price soared 5% to $54.53 on Thursday. In after-hours trading, the stock rose to nearly $69. The mobile payment service provider also announced fourth-quarter earnings on Thursday, with gross profit increasing 24% year-over-year.
Founded in 2009, Block is a global technology company based in San Francisco with operations in the United States, Canada, parts of Europe, Australia, and Japan.
In response to questions from CBC News, Block declined to say how many Canadian employees there were or how many employees in that country were included in the layoffs.
The layoffs are just the latest job cuts by the tech giant in recent months. Salesforce CEO Marc Benioff said in september The company reportedly cut nearly half of its workforce because AI reduced the number of employees needed, but Amazon Reduce the number of workers by 30,000 people Pinterest and Pinterest cut some 15% of employeesBoth to reallocate funding to AI initiatives.
Klarna CEO also said: AI has helped his company reduce its workforce by 40% in recent years. The company has since continued had to rehire workers Because the AI capabilities weren’t robust enough.
Amazon has confirmed it will cut 16,000 jobs from its global workforce as part of a plan to “reduce layers” and “eliminate bureaucracy” while increasing its reliance on AI. It’s unclear how many Canadian jobs will be affected.
But some experts have questioned how big a role AI is said to be playing in these cuts, including Block’s latest one.
Many technology companies hired heavily during the pandemic. This includes blocks whose number of employees has rapidly increased from approximately 3,800 in 2019 to more than 10,000 in 2025. Some experts point to overemployment as part of the reason for the layoffs.
“For blocks, [the layoffs] “It looks like a mix of AI efficiency and an overdue clean-up of corporate bloat,” Hargreaves Lansdown analyst Matt Blitzman told Reuters.
About XDorsey said his company overhired during COVID-19, but Block has already fixed that in 2024.
Tom Davenport, an IT professor at Babson College, agrees that overemployment, including wishful thinking about the current use of AI, may be a contributing factor.
Davenport surveyed more than 1,000 executives in late 2025: some of his research To understand the role of AI in the workplace. We found that while many organizations are downsizing or reducing hiring due to the promise of AI, only 2% of organizations are making headcount reductions related to AI implementation.
Companies are using AI recruiting bots to screen job applicants, narrow down candidates, and interact with candidates. Supporters say the technology frees human workers from tedious tasks, but some applicants say it adds chaos to the process and worries about job losses in human resources departments.
In other words, they were making cuts based on the promise of technology rather than what they could already achieve in the workplace.
Davenport doesn’t have inside information on how Block decided to cut its workforce, but he expects it to be another case of a company making cuts based on predictions about how AI will work.
“I would like to see more precision and analysis up front.” [companies] That’s the kind of announcement you make,” Davenport said.
Despite the wave of layoffs in the tech industry, Nathan Waulak, a tech recruitment consultant at Robert Half, says workers can still find great careers in the field.
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He agrees that overemployment has led to some high-profile layoffs at large companies. While large companies may not be hiring as much, Wallack says tech job seekers are finding work at mid-sized companies in other industries that need people to run the technology-based parts of their businesses, including in some cases these new AI tools.
“If you add up all of these companies, there’s actually a significant amount of new activity and new positions that are being created, and some of that is being driven by new tools that are coming to market,” Wawrach said.
Wallach acknowledges there are challenges, especially for new graduates with technology-related degrees, but says more jobs will be created as technology becomes more integrated into other industries.
