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Jack Dorsey’s mea culpa on Block layoffs: ‘We overhired’

by with No Comment Xpandfy

Jack Dorsey is taking responsibility for a key mistake behind Block’s sweeping job cuts.

“Yes we over-hired during COVID,” the Block cofounder and CEO wrote Friday on X, responding to criticism that the company’s recent layoffs reflected managerial incompetence.

The admission comes a day after Dorsey announced he was slashing nearly half of Block’s workforce — reducing head count from more than 10,000 employees to just under 6,000 in one of the most dramatic single-round layoffs in recent tech history.

In his latest X post, Dorsey said the overhiring stemmed in part from a structural misstep. He had built “2 separate company structures (square & cash app) rather than 1,” he wrote, a setup the company corrected in mid-2024, he said.

That duplication inflated head count as Block expanded aggressively during the pandemic.

But Dorsey said critics were oversimplifying the situation. Over the past several years, Block also took on significant operational complexity, expanding into lending, banking, and buy-now, pay-later products, he said.

Block is now targeting more than $2 million in gross profit per employee — roughly four times its pre-COVID efficiency, which Dorsey said remained flat at about $500,000 per person from 2019 through 2024.

“We have and do run an efficient company… better than most,” he wrote.

As of Friday, Block’s share price is roughly $54, virtually flat compared to its price in 2018, seven years ago.

The stock spiked from less than $75 pre-COVID to over $275 in early 2021, before dropping sharply at the end of that year. Since early 2022, the stock has traded at below $100 per share.

In the original memo announcing the cuts, Dorsey said he chose to make one large reduction rather than conduct repeated rounds of layoffs, which he called “destructive to morale.”

He said that the business itself is strong, with gross profit growing and profitability improving.

Instead, he pointed to what he described as a fundamental shift in how companies operate to justify the layoffs.

Intelligence tools and smaller, flatter teams are enabling “a new way of working,” he wrote, one that changes what it means to build and run a company.

Several other tech companies — including Amazon, eBay, Meta, and Workday — have also announced cuts in recent months, often citing AI-driven efficiency gains and organizational streamlining.

Last September, Micha Kaufman, the CEO and founder of Fiverr, announced a 30% workforce cut, citing the need to help turn Fiverr into a leaner, faster “AI-first company.”

“If you don’t ensure that you sharpen your knives, you’re going to be left behind. It’s that simple,” Kaufman told Business Insider last May.




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Jack Dorsey’s layoff memo is an ominous sign of what could come next

by with No Comment Xpandfy

White-collar workers, beware.

CEO Jack Dorsey is departing from the classic tech layoff playbook — and it could be a sign of what’s to come.

In a post on X on Thursday, the billionaire said he’s slashing nearly half Block’s workforce, cutting its over 10,000-person staff to just under 6,000. He said that he is doing this despite the business being strong and profits growing.

In tech’s hardcore era, many companies have paired down teams through repeated rounds of layoffs. Dorsey’s massive chop stands alone, however.

In his memo, the cofounder and CEO said repeated rounds of layoffs are “destructive to morale,” focus, and to the trust of customers and shareholders. He said he’d rather do the cuts in one fell swoop.

“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 in the post.

The company appears to have conducted repeated rounds of cuts in recent months, Wired reported.

Because repeated cuts create “layoff fatigue and chronic anxiety,” as well as drops in morale and productivity, it’s better to make a single reduction rather than piecemeal ones, Brooks Holtom, a professor of management at Georgetown University, told Business Insider.

Nevertheless, the size of the cut is notable, he said.

“This is a pretty extreme example in terms of the amount of people that are being let go all at once, but the packages are relatively generous,” Holtom said.

‘A new way of working’

The move to lay off over 40% of the company’s workforce signals a departure from the typical pattern followed by other Big Tech companies. It also raises the question of whether other firms will follow a similar trend, and some industry leaders have already commented on the move.

“Feels inevitable this is about to ripple through every public company. We’ve gotta find a way to make everyone an owner w/ some exposure to the upside as the # of employees falls off a cliff,” Jessica Verrilli, managing director and cofounder at Adverb Ventures said in a post on X.

Dorsey said that he’s adapting to an era in which technology is dramatically changing the workplace.

“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” Dorsey said in his memo on X.

In the company’s earnings call on Thursday, he said that more companies will follow suit in using AI to drive efficiency gains. Block is already ahead of the trend that “all companies will eventually” adopt, Dorsey said.

Michael Blank, an assistant professor of finance at Stanford Business School, told Business Insider that there could be a race among CEOs to convince investors that their companies are better positioned than their rivals to adopt abruptly changing AI technologies. Mass layoffs would be a potentially inexpensive way to signal that, he said.

Shares of Block were up over 20% in after-hours trading.

An uncertain future for white-collar workers

Block’s layoffs come in the wake of a viral report from research firm Citrini on February 22, that raised fears about the impact of AI and sent stocks tumbling. Citrini, a firm focused on thematic equity investing, laid out a predictive scenario in which AI continues to grow but proves detrimental to the broader economy.

A number of tech leaders have also been warning of a fundamental erosion of white-collar work.

Anthropic CEO Dario Amodei has sounded the alarm about a looming white-collar “bloodbath,” while Meta CEO Mark Zuckerberg has said AI is reshaping what individual employees can achieve.

Meanwhile, companies like Klarna have been more explicit about replacing human workers. CEO Sebastian Siemiatkowski said its workforce has halved over the last four years and will shrink further in the coming years. The company had 7,000 employees in 2022 and he said he expects the company’s workforce to drop below 2,000 by 2030.

Not everyone is convinced the end times are here for desk workers. While the World Economic Forum’s 2026 Global Risk report predicts that 92 million workers will be displaced by 2030, it also said 170 million roles will be created in that time frame, resulting in a net increase.




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