Block Cuts Half Its Staff for AI Makeover, Wall Street Cheers

6,000 people out of 12,000 will lose their jobs. That's the scale of Jack Dorsey's latest move at Block, the payments company formerly known as Square. The reason? "We're going all-in on AI."

Wall Street loved it. Block's stock jumped 15% immediately after the announcement, with investors applauding the "focus on efficiency." But for the 6,000 employees getting pink slips, it's a different story entirely.

When AI Becomes the New Excuse

This isn't your typical cost-cutting exercise. Dorsey told employees in an internal email that the company would "leverage AI technology to achieve greater results with fewer people." Translation: robots are taking your jobs, and shareholders couldn't be happier.

Block's move represents a troubling new trend in Silicon Valley. Companies used to blame layoffs on "economic uncertainty" or "market conditions." Now, "AI transformation" has become the socially acceptable excuse for mass firings. Meta, Amazon, and Google have all used similar playbooks, cutting tens of thousands while promising AI-powered futures.

The timing is telling. Block's revenue growth slowed to 12% last year, a far cry from the 100%+ growth rates during the pandemic boom. When growth stalls, the quickest path to Wall Street's heart is apparently through the unemployment line.

The Human Cost of Algorithmic Dreams

Here's what the press releases won't tell you: Block's core business—payment processing and financial services—already relies heavily on automation. The employees being cut aren't doing repetitive tasks that AI can easily replace. Many are engineers, product managers, and customer service specialists whose work requires creativity, empathy, and complex problem-solving.

Sarah Chen, a former Block product manager who survived previous layoffs, told industry publications: "We're not talking about replacing cashiers with self-checkout machines. These are knowledge workers who built the products that made Block successful."

The company's Cash App serves 50 million+ users, many from underbanked communities who rely on human support when things go wrong. Will an AI chatbot understand why someone's rent payment failed, or help a small business owner navigate a chargeback dispute?

The Domino Effect

Block's decision sends ripples across the fintech industry. Competitors like PayPal, Stripe, and emerging players are watching closely. If Block can maintain service quality with half the workforce, others will feel pressure to follow suit.

This creates a dangerous race to the bottom. Companies may prioritize short-term cost savings over long-term innovation and customer experience. The winners? Shareholders and executives. The losers? Workers and potentially customers who'll deal with degraded service.

But there's a bigger question: Does this actually work? Twitter's post-acquisition workforce reduction under Elon Musk offers a cautionary tale. While the platform still functions, many users report increased spam, slower customer support, and technical glitches.