AI + ML
One massive shot is clearly better for morale than dying from a drip
Twitter co-founder Jack Dorsey’s financial services company Block has announced that it will lay off 40% of its employees (about 4,000 people) because new “intelligence tools” it is deploying “can do more and do better.”
The company announced the layoffs in a letter to shareholders. [PDF] The announcement was made in conjunction with the fourth quarter results announcement on Thursday. The payments and cryptocurrency company reported quarterly revenue of approximately $6.25 billion, up 3.6% year over year, and gross profit of approximately $2.9 billion. The company made $1 billion in gross profit in December 2025 alone. Full-year sales were approximately $24.2 billion, and gross profit was approximately $10.36 billion.
I think the majority of companies will come to the same conclusion and make similar changes.
“2025 has been a strong year for our company,” Dorsey wrote in a letter to shareholders, before asking the question, “Why are we changing the way we operate going forward?”
His answer, across Letters and Xeet, was that AI had already changed how blocks worked, so we needed to change their structure.
“We’re already seeing the intelligence tools we create and use, combined with smaller, flatter teams, enabling new ways of working that fundamentally change what it means to build and run a company, and that’s rapidly accelerating,” he writes for X.
“Intelligence tools have changed what it means to build and run a company,” he wrote in a letter to shareholders. “We’re already seeing it internally. The tools we’re building allow even much smaller teams to do more and do better. And the capabilities of our intelligence tools are compounding faster and faster every week.”
“We could have phased in the layoffs over months or years as this change progressed, or we could have been honest about where we were and acted now,” Dorsey said of X.
He decided to lay off 4,000 people at once. That’s because “repeated layoffs undermine morale, focus, and the confidence our customers and shareholders have in our leadership.”
“Rather than slowly managing layoffs towards the same outcome, I would rather take tough, clear action now and build from a position we believe in,” he wrote, adding that “smaller companies also give us more room to grow the business in the right way, on our own terms, rather than always reacting to market pressures.”
Regardless of whether Mr. Dorsey is blaming AI or not, Mr. Bullock has underserved shareholders under his leadership over the past five years, with the stock price down about 80% from its 2021 highs. But investors liked Thursday’s story, sending Block’s stock up about 23% in after-hours trading.
“To those who stay here…I made this decision and I own it,” Dorsey wrote to X. “What I’m asking you to do is build with me. We’re going to build this company with intelligence at the core of everything we do.”
He added that Block’s actions and new direction will help customers navigate change by creating “a future where they can directly build their own capabilities that are comprised of our capabilities and delivered through our interfaces.”
“That’s what I’m focused on right now,” he wrote. “I think you’ll hear from me tomorrow.”
Until then, Dorsey plans to host a “live video session to thank everyone,” including about 4,000 people who have lost their livelihoods in the economic downturn.
“I think this approach may be awkward,” he wrote. “I prefer things that are awkward and human to things that are efficient and cold.”
Because it’s not cold to lay off 4,000 people to let machines take their jobs.
Dorsey doesn’t think Block will be the last company to change its operations for the age of AI.
“I don’t think we are coming to this realization any time soon,” he wrote. “I think most companies are behind the times.”
“I think within the next year, the vast majority of companies will come to similar conclusions and make similar structural changes. I would rather get there honestly and on their own terms than be passively forced.” ®
