One of the most well-known technology groups announces a radical restructuring: almost half of the employees are leaving, and the reason cited is artificial intelligence. The company’s CEO openly states that this is just the beginning and that, in the next year, „the majority of companies” will reach the same conclusion.
According to an article published by CNN, the American company Block – which owns the platforms Square, Cash App, and Afterpay – is reducing its staff by 40%, meaning over 4,000 employees. The total number of employees will decrease to just under 6,000.
"A smaller team can achieve more"
In a letter to shareholders, co-founder and CEO Jack Dorsey explains the decision by the rapid evolution of artificial intelligence tools.
"A significantly smaller team, using the tools we build, can do more and do it better. And the capabilities of the tools grow exponentially, from week to week," Dorsey wrote.
The company's CFO, Amrita Ahuja, put the strategy even more directly: "We see an opportunity to move faster with smaller, highly talented teams, using AI to automate more work."
"Business is going well, we are not in crisis"
Dorsey insisted, in a post on the X platform, that the layoffs are not a result of financial problems. "Our business is solid... gross profit continues to grow," he conveyed.
His message is that the restructuring is not a crisis response, but a strategic decision. The CEO believes that many companies are "lagging" and that, in the next 12 months, most will take similar actions.
"I prefer to get there honestly and on our terms, rather than being forced to react," he wrote.
Return to pre-pandemic levels
The phenomenon is not isolated. During the pandemic, major tech companies significantly expanded their staff to meet the increased demand for online services.
Block had 3,835 employees at the end of 2019, and before the layoffs, it had exceeded 10,000. Similar situations have occurred at other tech giants, which nearly doubled their workforce in just a few years.
Now, industry leaders are cutting costs and returning to more "leanly organized" structures, relying on automation and AI.
Generous compensations
The affected employees will receive at least five severance salaries, depending on seniority, shares granted by the end of May, six months of medical insurance, and an additional bonus of $5,000.
However, market reaction was favorable: after the announcement, Block's shares rose by up to 24%.
AI, the new pressure factor on the labor market
The layoffs come at a time when tools developed by companies like Anthropic or OpenAI are becoming increasingly efficient in office activities - from human resources to design and asset management.
More and more tech leaders argue that AI is "the most transformative technology since the internet," and the current restructuring could mark the beginning of a structural change in the labor market.
G.P.