Jack Dorsey admits he “overhired staff”, as Block cuts half of workforce to embrace AI

Jack Dorsey, CEO of fintech group Block, has admitted that the company overhired during the coronavirus pandemic, leading to the latest move that resulted in laying off half of the 10,000 workforce.

In an emotional note to staff published late Thursday on X, the former Twitter CEO said the company was halving its over 10,000 workforce to under 6,000 due to the increasing influence of artificial intelligence.

“We’re not making this decision because we’re in trouble. Our business is strong but something has changed. We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company and that’s accelerating rapidly.”

Dorsey explained that the decision was tough and instead of cutting gradually, the company felt it was best to act now. However, the decision came with pay support.

“First off, if you’re one of the people affected, you’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition,” he added.

The decision did not come without heavy criticism as several media professionals flayed Dorsey for fueling the narrative of AI snapping people’s jobs. One publication claimed that the fintech group which houses Square, CashApp and Tidal doubled its headcount from 3,900 to 12,500 within 2019 and December 2022.

Dorsey agreed with the analysis and responded with a tweet on X, explaining why the company hired more people in the past.

“Yes, we over-hired during COVID because I incorrectly built 2 separate company structures (Square & Cash App) rather than 1, which we corrected mid 2024. But this misses all the complexity we took on through lending, banking, and BNPL. We’re now targeting $2M+ gross profit per person, 4x our pre-COVID efficiency, which stayed flat at ~$500k from 2019 until 2024. We have and do run an efficient company… better than most,” the CEO explained.

The latest move to half headcount is in line with Block’s broader decision to restructure its business model and staff since 2024 as the company’s stock lagged. The company has elevated AI to run efficiently, building its own tool called Goose.

After the announcement, Block’s stock jumped as much as 27% in extended trading.

Block’s retreat follows a broader pattern across the technology sector. After a hiring spree fueled by cheap capital and a digital-first pandemic economy, giants like Amazon.com Inc. and Salesforce Inc. have aggressively trimmed staff.

What sets Block apart is the explicit justification of AI as a direct replacement for human roles. While many firms cite “macroeconomic headwinds,” Dorsey is leaning into the narrative that AI allows a company to remain “flat” and “fast,” prioritising profit-per-head over raw scale.