Twitter co-founder unleashes wave of massive layoffs due to AI in block

On Thursday, February 26, Jack Dorsey, co-founder of Twitter and CEO of Block, announced the layoffs of more than four thousand employees, almost half of the global workforce of the company that operates Square, Cash App and its Bitcoin ecosystem. The official reason: artificial intelligence.

“AI doesn’t reduce work. It transforms it, accelerates it, and in the most honest cases, replaces it,” Dorsey wrote, as Block stock rose 23% in after-hours trading.

This announcement raised alarm bells in the technology industry, but was also seen by the market as a strategic move anticipating structural changes driven by AI.

A GLOBAL TREND: AI AND WORKFORCE REDUCTION

Block is not alone. In recent months, large companies have justified massive cuts due to the adoption of artificial intelligence:

Amazon: 30,000 layoffs in two waves.

Pinterest: 15% reduction of its workforce in January.

Salesforce: from supporting 9,000 to 5,000 employees.

Duolingo: end of contracts for 10% of its collaborators.

Dow: elimination of 4,500 positions with process automation.

According to the firm Challenger, Gray & Christmas, in 2025, 55,000 layoffs worldwide will be attributed to AI, twelve times more than two years earlier. 2026 began with 26,000 tech jobs eliminated in the first weeks.

“AI can now handle translation tasks,” justified the CEO of Duolingo.

The pattern shows that these are not isolated cases, but rather a global trend.

LAY OFF DUE TO ACTUAL OR POTENTIAL AI CAPACITY?

Experts question whether the cuts are based on the actual efficiency of AI or its future promise.

“It’s hard to imagine a 50% efficiency gain at the enterprise level that justifies cuts of that magnitude,” explained Ethan Mollick, a Wharton professor.

A Harvard Business Review study published in January 2026 concluded that many companies lay off “because of the potential of AI, not because of its actual performance.” Consulting firm Gartner adds that only 1 in 50 AI investments generates transformational value and 1 in 5 offers any measurable return.

Forrester warns that half of AI layoffs could result in offshore rehires at lower salaries, and that 55% of employers regret laying off. This phenomenon is called AI washing, using AI as a pretext to justify strategic adjustments or cuts due to overcontracting.

DORSEY WARNING AND JOB IMPLICATIONS

Dorsey was explicit about the magnitude of the change:

“Within the next year, I think most will make similar structural changes. I’d rather get there honestly and on my own terms than be forced to do so reactively.”

The decision opens a debate about the future of employment: AI increases productivity and covers more roles, but it also intensifies the workload, increases burnout and increases turnover. Entry-level jobs, traditionally gateways to learning for new generations, are the first to go.

A NEW WORK MAP

Block may be an outlier: a profitable company that cuts from strength, not crisis. However, experts warn that this model could be quickly replicated in other companies, anticipating an unprecedented labor reconfiguration in peacetime.

“Employees who adopt AI tools do not work less, they work more,” concludes a study from UC Berkeley and Yale cited by Harvard Business Review.

The wave of layoffs raises questions about how to balance technological innovation and employment protection, in a context where AI becomes both a tool and an alibi.