Jack Dorsey just gave us our first glimpse at how doomsday layoffs could work in the AI era — and it's bleak

• CEO Jack Dorsey announced that Block will be slashing nearly half its workforce.
• Many tech companies have culled smaller proportions of workers in recent years.
• The move raises questions about whether other firms may follow suit as AI transforms workplaces.

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 of 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 the tech industry's hardcore era, many companies have pared down teams through repeated rounds of layoffs. Dorsey's massive chop stands alone.

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.

Dorsey wrote that laid-off employees would receive 20 weeks of base pay, plus an additional week for each year of tenure. Their equity will continue vesting through the end of May, and they'll receive six months of health coverage. The company is also allowing them to keep their corporate devices and will provide a $5,000 payment.

'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.