Block's Jack Dorsey wants nimble and quick. He thinks AI will do the trick.

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Block be nimble/Block be quick/Jack thinks cutting nearly half his staff because of AI will do the trick.

Block CEO Jack Dorsey announced he's cutting nearly half his staff, axing more than 4,000 of the company's 10,000 employees. It's a drastic move, especially considering Block is doing fine as a business, according to Dorsey.

"we're not making this decision because we're in trouble. our business is strong," Dorsey said in a lengthy post on X, a company he cofounded under its old moniker, Twitter. (You can read the full memo here.)

So what prompted Dorsey to cut his workforce almost in half overnight? Artificial intelligence.

"The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Dorsey wrote in a letter to shareholders.

On the company's earnings call, Dorsey said he noticed a significant uptick in AI capabilities late last year. Block CFO Amrita Ahuja added that engineer output is now up 40% thanks to AI. Dorsey also said the company's still in the market for senior AI engineering talent. (You and everybody else.)

Instead of dragging things out with incremental cuts, Dorsey deemed it better to get it over with. "i'd rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome," Dorsey wrote on X.

How are those affected reacting? A data analyst who survived three rounds of layoffs at Block found out he was losing his job while in the middle of interviewing someone for a role at the company. He told BI that he saw AI automating his work — and it ended his time at Block.

And don't get comfortable. Dorsey doesn't think he'll be the last CEO to take such dramatic actions.

Block's layoffs come as predicting AI doom and gloom is all the rage.

From the ongoing SaaSpocalypse to a viral essay about AI disrupting jobs to another viral research report predicting a market crash and mass unemployment, optimism is not high these days.

And right on cue, a company guts its staff, citing AI as the reason. It could serve as a bleak preview of a new era of doomsday layoffs.

One could argue that pointing the finger at AI is easier than acknowledging that things at Block are not actually fine. Before the announcement, the company's stock was down more than 80% from its 2021 highs. This year, shares were down by more than 16% before the news.

But Block's not alone in its struggles, as the broader fintech industry has taken a bath since its post-pandemic highs. Block's most recent earnings report also beat estimates and included a beefed-up outlook for gross profit in 2026.

Ultimately, the nuances of what's driving Block's cuts might not matter. Dorsey's decision to make preemptive cuts is bound to prompt other executives to rethink their own headcounts. (It's a copy-cat league, after all.)

The most unmistakable evidence that Block might be the first of many is the endorsement it received from a group that executives are always eager to please: investors. Block's stock was up around 18% in pre-market trading.