Block, the company behind Square, Cash App and Afterpay, announced a 40% reduction in its workforce, in a restructuring that is expected to result in the dismissal of more than four thousand people. The decision was communicated in a letter to shareholders signed by co-founder Jack Dorsey, who attributed the cuts to the advancement of Artificial Intelligence (AI) tools.
With the measure, the company should start operating with just under six thousand employees. According to Dorsey, the change is not the result of financial difficulties, but of a strategic choice in the face of technological evolution.
“A significantly smaller team, using the tools we are developing, can do more and better. And the capabilities of Artificial Intelligence tools are multiplying faster and faster”, wrote the executive.
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In a post on the social network X, Dorsey stated that the company’s performance remains solid:
“Our business is strong… Gross profit continues to grow.”
The company’s financial director, Amrita Ahuja, reinforced the speech by highlighting that Block sees an opportunity to accelerate results with smaller, highly qualified teams, supported by automation via AI.
“We see an opportunity to move faster with smaller, highly talented teams, using AI to automate more tasks,” she said.
Affected employees will receive, according to the company, at least 20 weeks’ salary as compensation, with higher amounts for those who have worked longer. The package also includes shares acquired until the end of May, six months of health insurance, maintenance of corporate devices and a bonus of US$5,000.
Block’s move comes at a time when AI has been reshaping administrative, operational and creative functions in the technology sector, expanding the debate about the impact of automation on the job market.
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Giants such as Amazon, Meta, Microsoft and Verizon also made significant cuts last year, in restructurings associated, directly or indirectly, with the incorporation of artificial intelligence into internal processes.
In a memo released in October, Amazon classified AI as “the most transformative technology since the internet” and advocated fewer hierarchical layers to operate with greater agility.
