Jack Dorsey has long been an open admirer of Elon Musk. Now, it seems, he may have been taking notes. On Thursday, Dorsey announced that Block, the payments company he founded that operates Square, Cash App, and Tidal, is cutting more than 4,000 employees. This represents nearly half of its global workforce, taking it from over 10,000 workers down to just under 6,000. Investors responded enthusiastically, sending the stock up more than 24% in after-hours trading.
It isn’t the first time a major tech company has done something of the sort. In November 2022, Musk slashed roughly 50% of Twitter’s staff in a single stroke after taking the company private. That move rattled many in Silicon Valley and rewrote the unofficial rules for how far a CEO could go in one shot.
Dorsey was in an unusual position to watch it unfold. He’d rolled his roughly 2.4% ownership stake in Twitter into Musk’s takeover rather than taking a cash payout, making him one of the largest outside investors in what became X. The two men have had one of tech’s stranger relationships, with warm words giving way to public criticism, then back again. Dorsey championed Musk’s Twitter acquisition, then said Musk should have walked away. He helped launch Bluesky, the decentralized Twitter alternative, then quit its board and called X freedom technology. Both are also vocal Bitcoin advocates, with Block and Tesla each carrying the cryptocurrency on their balance sheets.
Dorsey framed Thursday’s cuts as a proactive, even empathetic, choice, and not a financial emergency. He noted that the 4,000 people losing their jobs may see it differently. He wrote that repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in a company’s ability to lead. He predicted that within a year, most companies will arrive at the same place, and said he would rather get there honestly and on his own terms than be forced into it reactively.
The cuts are being driven, at least officially, by AI. Block CFO Amrita Ahuja said the cuts will position 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 made enormous staffing cuts while citing the increased gains they are seeing from AI. However, a recent Forrester Research report cast some doubt on how real those gains are versus the likelihood that many layoffs are financially driven.