Jack Dorsey laid off 4,000 people and called it an AI strategy. But when AI creates time, the interesting question isn't whether to cut—it's what you choose to do with the time you've freed. Dorsey chose to give it away.
Jack Dorsey laid off 4,000 people and called it an AI strategy. But when AI creates time, the interesting question isn't whether to cut—it's what you choose to do with the time you've freed. Dorsey chose to give it away.
Last week, Jack Dorsey announced his company, Block, was laying off more than 4,000 of its 10,000 employees. He claimed that he wasn't making this decision because the company is "in trouble," but, rather, because AI, paired with smaller teams, "are enabling a new way of working."
Let's start with the Block-specific parts of his message and then get to his projection beyond Block.
The claim that Block is able to replace 40%+ of its employee productivity with AI doesn't make any sense. First, no other tech leader is claiming that kind of productivity enhancement. So for this to be true, you have to assume that Jack's team has figured out some use of AI that no one else has. The company's 2025 financial performance showed slowing top-line and bottom-line growth, so there's nothing from the outside that displays heightened productivity—yet.
The before/after transition of removing 4,000 people while continuing with the same business performance doesn't add up either. Given that there was no material change to the company's performance before this transition, the only explanation is that Jack has kept his AI superpowers from his 10,000 employees but will suddenly bestow them on the remaining 6,000 to pick up the slack from the 4,000 left behind.
The company's guidance shows no new growth. While adjusted operating income is showing predictable growth from the layoff, gross profit growth is forecast to be inline with the past two years. So this appears to be nothing but a simple profit extraction move of reducing excess headcount and claiming it's being done because of new AI-enhanced capabilities. This wouldn't be the first time Jack has been accused of hiring too many people (see Twitter).
So, is this really about AI? I don't think so.
The reality is that Block has been a disappointing stock. Before the layoff announcement, XYZ (Block's NYSE ticker) was down more than 10% in the past year. It's not alone—software has had a rough year—but let's not pretend that this change was made from a position of strength. This isn't because Block is unprofitable—it's that the company's growth has been slowing for years.
As a financial transaction company, Block is a steady earner, though, and much less likely to be exposed to the threats of AI agents than other software companies. So might Jack be worried that the private equity investors who have soured on SaaS companies would see Block as an acquisition target—like his former company, Twitter? If so, extracting all the excess cost while the company is under his control might be a savvy play. He has essentially done the PE firm's job for them before they arrive.
No matter what the particulars are at Block, the most interesting part of this saga is what Jack projected beyond his own company. In his remarks on the company's earnings call, he said:
"I don't think we're early to this realization. I think most companies are late. 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."
Given the world's seemingly unending fascination with tech CEOs, plenty of people took Jack at his word—that the majority of companies would follow his lead and fire half of their people. There are reports from startup-watchers like Harry Stebbings that startups with 500–1000 employees are planning 20% headcount reductions.
The Jackpocalypse is coming! Or is it?
There is a grain of truth in Jack's prediction. AI is already changing team structures. Some roles will be absorbed by tools. Companies that ignore this will eventually face competitive pressure from those that don't. None of that is controversial.
But the interesting question isn't whether AI will change how companies operate. It's what leaders choose to do with the productivity gains when it does. And here, there are two very different paths.
The first path is the one Jack chose: use AI to shrink. Reduce headcount, extract profit, and deliver the savings to shareholders. Call it the efficiency play. It's legible to Wall Street, it's fast, and it's exactly what a private equity firm would do after acquiring a mature business.
The second path is harder to execute but far more interesting: use AI to expand. Take the productivity surplus and redeploy it toward new growth—new products, new markets, new problems that weren't economically viable to tackle before.
This is the fork that matters, and it's the one that most commentary about AI and jobs is missing entirely.
Here's another way to think about the choice. What AI actually creates, when it works, is time. It compresses tasks, accelerates decisions, and frees up human capacity that was previously consumed. Time is perhaps the most precious resource a company has—it's the raw material of innovation, the thing you never have enough of when you're trying to build something new.
Jack had a remarkable opportunity. AI handed him a gift of time—8,000,000 person-hours liberated—and he had to decide what to do with it. He could keep that time inside Block, redirect it toward new avenues of growth and innovation, and use it to build the company's future. Or he could give it away, converting it into profit and handing it to his investors.
He chose to give it away.
Consider Block's own situation. The company posted its highest quarterly profit ever. It generates $1.7 billion in annual operating income. It is not financially constrained. Now imagine that Jack, instead of cutting 4,000 people, had announced that he was splitting his company in two: 6,000 AI-powered people who would continue to grow the core Block business, and 4,000 AI-powered people who would form a new incubation unit, tasked with building Block's next massive growth opportunity.
Same AI story. Same acknowledgment that productivity is changing. Completely different strategic conclusion. One treats people as cost to be eliminated. The other treats AI-augmented people as a growth asset to be deployed.
Jack chose door number one. And in his earnings remarks, he went further, saying Block was "moving toward a model where our customers can build their own features directly on top of our capabilities." In other words, Block isn't just shrinking its workforce—it's shrinking its ambition, retreating from building differentiated value—enabled by shifting work to its customers like supermarkets did with self checkout.
Now zoom out. If Jack is right that the majority of companies will reach the same conclusion—and if that conclusion is "fire people, extract profit"—then we have a composition problem.
The efficiency play works in isolation. One company cuts costs, improves margins, and gains a financial edge. But this is destructive if every company does it simultaneously.
There's the consumer demand problem: the customers who buy these companies' products are, in aggregate, the same people being laid off. There's also a business demand problem: companies that shrink their teams also shrink their ambitions and expenses. They need fewer tools, fewer services, fewer partnerships. They buy less software, commission fewer projects, explore fewer markets. The contraction cascades through the entire B2B ecosystem. It's not just that laid-off workers stop spending—it's that smaller, less ambitious companies stop investing. Every company that converts its AI-liberated time into profit extraction rather than growth becomes one fewer source of demand for every other company in the economy.
This is the Jackpocalypse scenario, and we're in danger of it morphing into a systemic problem. A collective failure of imagination masquerading as operational efficiency.
The irony is that AI's real promise points in the opposite direction. The whole premise of AI-augmented productivity is that you can do more with the same resources. "More" is the operative word—not "the same with fewer." If AI truly delivers the productivity gains its champions claim, the right response isn't to shrink but to ask: what couldn't we do before that we can do now?
That's the question Jack never asked, at least not publicly. And if the Jackpocalypse does arrive—if company after company follows his lead and treats AI purely as a headcount reduction tool—it won't be because the technology demands it. It will be because leaders look at the most precious resource AI could give them—time to think, to explore, to build—and decide to give it away.
We can’t help wondering what those 4,000 people — with their combined expertise and deep, tacit knowledge of what was possible within Block’s infrastructure — might have achieved with cognitive whitespace, time, and genuinely human-enhancing AI.
Dave Edwards is a Co-Founder of Artificiality. He previously co-founded Intelligentsia.ai (acquired by Atlantic Media) and worked at Apple, CRV, Macromedia, Morgan Stanley, Quartz, and ThinkEquity.
AI changes what you can know, which changes what feels meaningful to you. If consciousness is the subjective experience of meaning-making in action, then AI absolutely changes consciousness.
