Jack Dorsey cuts 4,000 roles, says AI requires smaller teams

Former founder of Twitter Jack Dorsey has announced the layoff of 40% of the employment workforce from his company Block, saying that artificial intelligence tools now allow the company to operate with smaller teams.

The announcement came in a shareholder letter alongside Block’s latest earnings report, where the financial services firm outlined its shift toward an AI-driven structure.

AI replacing roles in tech industry 

Block reported quarterly revenue of $6.25 billion, up 3.6% year on year, with gross profit reaching $2.9 billion. Full-year revenue stood at $24.2 billion. Despite the solid financial results, Dorsey said the company must change how it operates within the AI era.

In the shareholder letter, Dorsey wrote that new intelligence tools are already transforming how Block builds products and runs operations. He said smaller, flatter teams using these AI tools can “do more and do it better", adding that the capabilities of such systems are improving every week.

Rather than implementing gradual layoffs, Dorsey chose a single round of cuts. He said repeated job reductions would damage morale and trust. “I’d rather take a hard, clear action now,” he wrote, arguing that a leaner organisation would allow Block to grow on its own terms instead of reacting to market pressure.

Reportedly, the announcement of AI restructuring has caused the Block's stock to rise by about 23% in after-market trading after the decline of 80% over the past five years.

Dorsey also highlighted that other companies would soon follow the same path to restructure the acceleration of AI adoption in their companies. He stated that most companies are “late” to the realisation that artificial intelligence is transforming business models.