Jack Dorsey cut the size of Block’s employee base in half — and says your company is next

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

Dorsey announced Thursday that Block, the payments company he founded that operates Square, Cash App and Tidal, will lay off more than 4,000 employees, nearly half its global workforce, trimming its workforce from more than 10,000 workers to just under 6,000. Investors responded enthusiastically, sending the stock up more than 24% in after-hours trading.

This is not the first time a major technology company has done something like this. In November 2022, Musk cut nearly 50% of Twitter’s staff in one fell swoop after taking the company private, a move that alarmed many in Silicon Valley and rewrote the unofficial rules about how far a CEO can go in one shot.

Dorsey was in the unusual position of watching it unfold. He converted his roughly 2.4% Twitter ownership stake into Musk’s buyout rather than receive cash compensation, making him one of the largest outside investors in what later became X.

The two men had one of the strange relationships in technology, where warm words gave way to public shots, and then came back again. Dorsey defended Musk’s Twitter takeover, then said Musk “should have gone.” He helped launch Bluesky, the decentralized alternative to Twitter, then resigned from its board and called X “freedom technology.” Both are also vocal advocates of Bitcoin – Block and Tesla both hold the cryptocurrency on their balance sheets.

Dorsey framed the cuts Thursday as a proactive, even sympathetic, choice, rather than a financial emergency. (The 4,000 people who lost their jobs may see it differently.) “Repeated rounds of cuts are devastating to morale, focus, and the trust customers and shareholders place in our ability to lead,” he wrote on X. He expected that most companies would reach the same place within a year. “I would rather get there honestly and on our own terms than be forced to do it reactively,” he said.

The cuts are driven, at least officially, by artificial intelligence. Block’s CFO, Amrita Ahuja, said the cuts will enable the company to “move faster with smaller, more talented teams that use artificial intelligence to automate more work.”

Salesforce and Amazon are among a growing list of other companies that have made massive headcount cuts, citing the growing gains they’re seeing from artificial intelligence, though a Forrester Research report last month cast some doubt on how real those gains are versus the possibility that many of the layoffs are financially driven.