Jack Dorsey just halved the size of Block’s employee base — and he says your company is next

Jack Dorsey has long been an outspoken fan of Elon Musk. Now, it seems, he might have been taking notes.

On Thursday, Dorsey was announced that Block, the payments company that founded and runs Square, Cash App and Tidal, is cutting more than 4,000 employees, nearly half its global workforce, reducing it from over 10,000 employees to just under 6,000. Investors responded enthusiastically, sending the stock up more than 24% in after-hours trading.

This isn’t the first time a major tech company has done something like this. In November 2022, Musk cut about 50% of Twitter’s staff in one fell swoop after taking the company private, a move that shocked many in Silicon Valley and rewrote the unofficial rules of how far a CEO could go with an opportunity.

Dorsey was in an unusual position to watch it unfold. He had thrown about 2.4% of his Twitter ownership stake into Musk’s buyout rather than take a cash payment, making him one of the largest outside investors in what became X.

The two men have had one of tech’s strangest relationships, with heated words giving way to public shots and then back again. Dorsey defended Musk’s acquisition on Twitter, then said Musk “should have gone.” He helped launch Bluesky, the decentralized alternative to Twitter, then stepped down from the board and called X “freedom technology.” Both are also staunch supporters of Bitcoin — Block and Tesla carry the cryptocurrency on their balance sheets.

Dorsey characterized Thursday’s cuts as a precautionary, even compassionate, choice rather than a financial emergency. (The 4,000 people losing their jobs may see it differently.) “Repeated cycles of cuts are destructive to morale, focus, and the confidence that customers and shareholders place in our ability to lead,” he wrote in X. He predicted that within a year, most companies will be in the same place. “I’d rather get there honestly and on our terms than be forced to do it reactively,” he said.

The cuts are being driven, at least officially, by AI. Block CFO Amrita Ahuja said the cuts will enable the company to “move faster with smaller, highly talented teams using AI to automate more work.” Salesforce and Amazon are among a growing list of companies that have huge staffing cuts citing the increased profits they see from artificial intelligence, although a Forrester Research report last month cast some doubt about how real these gains are versus the possibility that many layoffs are economically driven.