Jack Dorsey cuts Block’s workforce in half, warns more companies could follow

Jack Dorsey has never hidden his admiration for Elon Musk, and his latest move suggests he may have borrowed a page from Musk's playbook.

On Thursday, Dorsey said Block—the payments company he founded that runs Square, Cash App, and Tidal—will lay off more than 4,000 employees, reducing its global headcount by nearly half. The cut reduces Block's workforce from over 10,000 to just under 6,000. Investors cheered the decision, pushing the stock up more than 24% in after-hours trading.

This isn't the first time the tech industry has seen a dramatic workforce reset like this. In November 2022, Musk cut about 50% of Twitter's staff in one sweeping move after taking the company private. That decision shocked much of Silicon Valley and effectively reset assumptions about how aggressively a CEO could restructure a company in a single step.

Dorsey had an unusually close view of that episode. Instead of cashing out, he rolled his roughly 2.4% stake in Twitter into Musk's acquisition, making him one of the biggest outside investors in what later became X.

The relationship between Dorsey and Musk has been one of the more unusual in tech, shifting from praise to criticism and back again. Dorsey supported Musk's Twitter takeover, later said Musk "should have walked away," helped launch Bluesky as a decentralised Twitter alternative, then resigned from its board and described X as "freedom technology." Both men are also outspoken Bitcoin supporters, and both Block and Tesla hold the cryptocurrency on their balance sheets.

Dorsey described Thursday's layoffs as a deliberate and forward-looking decision rather than something forced by a financial crisis—though the people losing their jobs may not see it that way. "Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead," he wrote on X. He also predicted that many companies will reach a similar point within a year. "I'd rather get there honestly and on our own terms than be forced into it reactively," he said.

Officially, the cuts are being tied to AI. Block CFO Amrita Ahuja said the reductions will help the company "move faster with smaller, highly talented teams using AI to automate more work."

On severance, Dorsey told U.S.-based employees affected by the layoffs that they will receive "your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of [M]ay, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition." For employees outside the U.S., he said they will receive "similar support" depending on local country policies.

Salesforce and Amazon are among a growing list of companies that have cited AI-driven productivity gains while making major staffing reductions. Still, a Forrester Research report last month raised questions about how much of those gains are truly driven by AI versus the possibility that many of these layoffs are primarily financially motivated.