Block Cuts Over 4,000 Jobs as Jack Dorsey Bets on AI to Replace Developer Teams
Jack Dorsey's payments company Block is slashing its workforce nearly in half, from over 10,000 to under 6,000, in one of the most aggressive AI-driven restructurings yet — with major implications for software developers across the industry.
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Block Cuts Over 4,000 Jobs as Jack Dorsey Bets on AI to Replace Developer Teams
Jack Dorsey's financial technology company Block is eliminating more than 4,000 positions — nearly half its workforce — in a sweeping restructuring that the Twitter co-founder says is driven by artificial intelligence capabilities that can now do work previously requiring large engineering teams.
In a note to employees posted on X, Dorsey called the move "one of the hardest decisions in the history of our company," saying Block would shrink from over 10,000 employees to just under 6,000.
The layoffs represent one of the starkest examples yet of a major tech company explicitly linking mass workforce reductions to AI's growing ability to automate software development. And Dorsey signaled the trend is far from over.
"I don't think we're early to this realisation," he said Thursday. "I think most companies are late."
Dorsey said he believes the majority of firms will make similar changes "within the next year," a warning that carries particular weight for developers and engineers whose roles have long been considered among the most secure in tech.
What This Means for Developers
The announcement lands amid a broader industry shift toward AI-powered coding tools like Anthropic's Claude Code and OpenAI's Codex, which can automatically generate the computer code needed to build and maintain software. These tools are increasingly capable of handling tasks that have traditionally required teams of highly trained engineers.
Meta CEO Mark Zuckerberg has echoed similar sentiments, saying he expects "2026 to be the year that AI dramatically changes the way we work." He added: "We're starting to see projects that used to take big teams now be accomplished by a single, very talented person."
The implication is clear: the demand isn't disappearing for skilled developers, but the number of developers needed to accomplish the same work may be shrinking dramatically. Companies appear to be betting that smaller teams armed with AI tools can match or exceed the output of much larger engineering organizations.
Block's restructuring will cost the company up to $500 million (£370 million), according to its financial report. Despite the scale of the cuts, investors responded enthusiastically — Block's shares surged more than 20% in extended trading after the announcement.
A Pattern Across Big Tech
Block is far from alone. Amazon laid off 16,000 employees at the end of January, having already cut 14,000 roles months earlier. Amazon's chief financial officer Brian Olsavsky said the company was pursuing cost reductions as it ramps up AI spending. Meta, Microsoft, and Google have all made similar moves, shedding workers while pouring billions into AI infrastructure.
Some analysts have cautioned that the immediate threat to developer jobs may be overstated by executives eager to appear ahead of the curve on AI adoption. But the sheer scale of Block's cuts — nearly 50% of its workforce — suggests this is more than posturing.
For the thousands of developers and engineers now entering a tightening job market, the message from Silicon Valley's leadership is increasingly unified: AI fluency isn't optional, and the era of large engineering teams may be drawing to a close.
Block's strong financial results, with rising profits driven by demand for its products, underscore a difficult reality — companies can grow revenue while dramatically shrinking headcount. Whether that model proves sustainable, or whether it creates quality and innovation gaps down the line, remains an open question.
