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

Jack Dorsey has long been an avowed admirer of Elon Musk. Now it looks like he’s been taking notes.

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

It’s not 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 roiled many in Silicon Valley and rewrote the unofficial rules for how far a CEO could go at once.

Dorsey was in an unusual position to see it happen. He had put his roughly 2.4% ownership stake in Twitter into Musk’s acquisition rather than receive a cash payout, making him one of the largest outside investors in what became X.

The two men have had one of tech’s strangest relationships, with warm words giving way to public shots and then back again. Dorsey was in favor of Musk’s Twitter takeover, then said Musk “should have walked away.” He helped launch Bluesky, the decentralized Twitter alternative, then resigned from the board, calling X “freedom technology.” Both are also outspoken supporters of Bitcoin: Block and Tesla each carry the cryptocurrency on their balance sheets.

Dorsey described Thursday’s cuts as a proactive, even empathetic choice, and not a financial emergency. (The 4,000 people who will lose their jobs may see it differently.) “Repeated cuts are destructive to morale, focus and the trust customers and shareholders place in our ability to lead,” he wrote on X. He predicted that most companies will arrive at the same place within a year. “I would rather get there honestly and on our own terms than be forced into it reactively,” he said.

The cuts are, at least officially, driven by AI. Block CFO Amrita Ahuja said the cuts will allow 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 achieved great success enormous staffing cuts citing the increased profits they see from AI, according to a report from Forrester Research last month sow some doubt about how real these gains are versus the likelihood that many layoffs are financially driven.