Jack Dorsey, the creator and former president of Twitter (now X), has always prided himself on being ahead of the curve. He has built his entire career around the idea of anticipating trends in business, often to the point of eccentricity.
His philosophy isn't just about business trends; it's a personal identity rooted in the belief that he can foresee and build the future of human interaction and finance. He proved it by creating a dominant social media company. He proved it with his creation of the Square reader by "democratizing " access to credit card processing.
Now he's about to take the lead by grabbing onto the AI revolution with both hands. He's cutting his 10,000-person workforce by 40% to start embracing artificial intelligence models he believes will revolutionize how companies are run.
“The core thesis is simple,” wrote Dorsey on X. “Intelligence tools have changed what it means to build and run a company.”
"Something has changed. 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," he wrote.
Dorsey has shown in the past that he's willing to take a leap in the dark after careful study and contemplation. I don't think he's ever made this kind of calculated gamble.
data-pasted="true">I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. 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. A smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures.
Wall Street loved the move. Shares of Block rallied 20% after the announcement.
It should be noted that Block and other financial services companies are particularly vulnerable to the siren song of AI and models that can streamline operations with fantastic results. Coding that took a week or weeks was being completed in a matter of hours. Other research tasks are also now obsolete, for the most part, as AI models can sift through mountains of information in a matter of minutes.
Dorsey's announcement has raised the panic level in some industries considerably.
Big companies have already been laying off thousands of white collar workers over the past year, in some cases pointing to increased efficiency created by AI. Salesforce cut roughly 4,000 customer-support roles last year because of AI advancements. Pinterest, meanwhile, has said it is laying off nearly 15% of its workforce as part of a plan to focus more of the company’s resources on AI-related roles.
Then earlier this week, fears that AI will wipe out jobs and replace the functions of whole companies sparked a market rout after a report imagined such a dystopian future for the U.S. economy.
Analysts and economists have pushed back against the scenarios laid out in the report, but Block’s drastic job cuts will likely stoke those fears.
"Many AI executives and investors insist that the tech will lead to temporary labor dislocations rather than net job loss, echoing the industrial revolution," Axios notes. The genius of American capitalism has always been the ability of some people to spot opportunity where others see calamity. I think the net result of AI on jobs will be positive, as people develop more and more ideas to exploit AI in profitable ways.
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