Block CEO Jack Dorsey’s move to cut nearly half the company’s workforce is shining a spotlight on a growing question for corporate America: whether advances in artificial intelligence will ultimately mean fewer workers.
In an earnings call Thursday, Dorsey said Block will cut about 4,000 jobs.
Dorsey framed the move as more than a cost-cutting exercise, instead describing a shift in how companies operate as artificial intelligence becomes more central to business decisions.
He also suggested other companies will follow suit.
“I don’t think we’re early to this realization. I think most companies are late,” he said. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively.”
Economists, however, question whether such moves signal a broader shift in the labor market or simply reflect company-specific adjustments.
“This is a function of lax judgment during a period of rapid expansion and the retrenchment that follows,” said Joseph Brusuelas, chief economist at RSM. “It should be understood within the unique context of that firm, and it does not signal risk to the broader U.S. labor market.”
Doubts about jobs
The layoffs come amid broader questions about the employment picture.
Though job cuts have remained low and the unemployment rate is a relatively healthy 4.3%, openings have contracted sharply and hiring in 2025 largely flatlined, with average payroll growth of just 15,000.
Still, the tech-related picture looks relatively healthy.
The information sector, one proxy for the tech industry, saw its unemployment rate fall to 5% in January, down 0.7 percentage point from a year ago. Job openings have declined in the sector, but demand for some roles remains firm: Postings in software development are up 12% from a year ago, according to Indeed.
Most economists remain sanguine on the labor market, even in the current “low-hire, low-fire” environment.
Claudia Sahm, chief economist at New Century Advisors, said Friday on CNBC that while it is “healthy” to discuss AI’s potential impact, it is important not to overinterpret individual company decisions.
“I would not extrapolate from Block to the whole U.S. economy,” Sahm said. “It’s important to understand that these AI tools — the direction you go with them really depends on the leadership. Automation, mass layoffs is not necessarily the only path forward.”
AI’s broad impact
A widely-discussed speech earlier this week by Federal Reserve Governor Christopher Waller also underscored the challenges and opportunities AI presents.
While discussing the Fed’s internal use of the technology, Waller said AI is more likely to enhance productivity than eliminate jobs outright.
“When ATMs were first introduced, they didn’t eliminate bank tellers. Instead, they changed how banking worked,” he said. “The real impact wasn’t automation alone — it was how institutions reorganized around technology. AI is similar. The biggest gains won’t come from simply adding AI to existing processes. They’ll come from rethinking workflows, roles and systems.”
But even if layoffs are not yet widespread — and Dorsey’s warnings are not necessarily a broad harbinger — companies are beginning to rethink how they allocate resources.
Tech jobs account for only about 5% to 7% of the total labor force, but AI technology itself is spreading far beyond the sector.
“Some jobs are apt to be disrupted by AI” as companies reconsider the balance between labor and technology, said Laura Ullrich, director of economic research for North America at Indeed Hiring Lab.
“Companies are really shifting their investments toward capital spending and away from labor,” Ullrich added. “They’re investing in AI with the hope that it can replace jobs.”
