Block Cuts 4,000 Jobs, Stock Soars 24%. The Musk Playbook?

4,000 People Lost Their Jobs. The Stock Jumped 24%.

Jack Dorsey just pulled an Elon Musk. On Thursday, his payments company Block announced it's cutting more than 4,000 employees—nearly half its global workforce—taking it from over 10,000 workers down to just under 6,000.

Investors loved it. The stock surged more than 24% in after-hours trading.

Sound familiar? It should. This is straight from the playbook Musk wrote when he slashed roughly 50% of Twitter's staff in November 2022. Back then, Silicon Valley was rattled. The unofficial rules about how far a CEO could go in one shot got rewritten overnight.

The Musk Connection Runs Deep

Dorsey had a front-row seat to Musk's Twitter takeover. Rather than taking cash, he rolled his roughly 2.4% ownership stake into the deal, making him one of the largest outside investors in what became X.

Their relationship is... complicated. Dorsey championed Musk's acquisition, then said Musk "should have walked away." He launched Bluesky as a decentralized Twitter alternative, then quit its board and called X "freedom technology." Both are vocal Bitcoin advocates—Block and Tesla each carry the cryptocurrency on their balance sheets.

"It's About AI," They Say

Dorsey framed the cuts as proactive, even empathetic. "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 predicted that within a year, most companies will arrive at the same place.

Block CFO Amrita Ahuja cited AI as the driving force: 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 making enormous staffing cuts citing AI gains. But a Forrester Research report last month cast doubt on how real those gains are versus the likelihood that many layoffs are financially driven.

The New Math of Tech Employment

Here's what's really happening: the tech industry is redefining what "optimal" staffing looks like. The old model was growth at all costs—hire fast, scale quickly. The new model? Lean teams powered by AI automation.

But there's a darker question lurking beneath the surface. If AI can truly replace 4,000 jobs at Block, what does that mean for the millions of other tech workers? Are we witnessing the beginning of a fundamental shift in how technology companies operate?

The timing isn't coincidental either. As AI capabilities expand rapidly, companies are under pressure to prove they can harness these tools effectively. Cutting staff while maintaining (or improving) output becomes a powerful signal to investors.