Morning Minute: Jack Dorsey Slashes 40% of Block's Jobs Due to AI

GM!

Today’s top news:

The Citrini article was right. But maybe not that early.

The Block headcount is dropping from 10,200 to just under 6,000, all while the business is objectively not struggling.

Jack’s letter was blunt:

“Intelligence tools have changed what it means to build and run a company. A significantly smaller team, using the tools we’re building, can do more and do it better.”

He had two options, he said: cut slowly over months as AI takes over, or do it now. He chose now.

Block expects $450M to $500M in restructuring charges, mostly landing in Q1.

Notably, XYZ shares jumped 23% in after-hours trading.

“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.” - Jack Dorsey

“We are choosing to shift how we operate at a time when our business is accelerating.” - CFO Amrita Ahuja

The timing of the Block cuts is critical to the virality of the story, coming on the back of the Citrini article which severely impacted markets just a few days ago.

If Jack cuts these jobs 3-4 months ago, it’s a blip on the radar.

But now everyone is paying attention and on hyper alert. And the fact that the market responded well (XYZ up 25% on the news) means that many other CEOs are likely going to evaluate their own cuts at a minimum.

Is cutting jobs the correct decision in the beginning of the AI era?

I’m personally not so sure (but that’s a longer discussion).

The reality is that every fintech, every exchange, and every crypto-adjacent company (hell, most companies in the world) now has a template and path to follow.

Cut to a smaller team, use AI tools, and generate the same or better output. And watch the market pump your stock by 25%.

So what does this mean for crypto?

The bull case: capital moves out of labor and into assets. Equities, real estate, and Bitcoin outperform. Bitcoin reclaims its digital gold status as a new generation looks for native assets to preserve wealth.

The bear case: if wages actually contract across huge swaths of employees, the retail bid for risk assets dries up. The people buying $500 of BTC on Cash App are no longer buying. The institutional bid slows. And crypto sees an extended winter until the AI crisis is resolved.

But certainly there will be other, bigger concerns if that bear case plays out. Let’s hope it doesn’t…