Block CEO Jack Dorsey’s move to cut nearly half his workforce spotlights a growing question for American companies: whether advances in artificial intelligence will ultimately mean fewer employees.
Dorsey said on Thursday’s earnings call that Bullock will cut about 4,000 jobs.
Dorsey described the move as more than just a cost-cutting effort, but a shift in the way companies operate as artificial intelligence becomes central to business decision-making.
He also suggested other companies would follow suit.
“I don’t think we’re quick to realize this. I think most companies are late,” he said. “I believe that within the next year, the vast majority of companies will come to similar conclusions and make similar structural changes. I would rather get there honestly and on our own terms than be passively forced.”
But economists question whether these developments signal broader changes in the labor market or simply reflect company-specific adjustments.
“This is the result of poor judgment during a period of rapid expansion followed by a period of contraction,” said Joseph Brusuelas, chief economist at RSM. “This should be understood within the company’s own context and does not suggest a risk to the broader U.S. labor market.”
doubts about work
The job cuts come amid widespread questions about the employment situation.
While layoffs remain low and the unemployment rate is relatively healthy at 4.3%, the number of job openings has fallen sharply, with employment remaining roughly flat in 2025 and average employment growth of just 15,000 people.
Still, the technology landscape looks relatively healthy.
In the information sector, one of the leading high-tech industries, the unemployment rate fell to 5% in January, down 0.7 points from the same month last year. Although the number of jobs in this field is decreasing, demand for some positions remains strong. Software development jobs are up 12% from a year ago, according to Indeed.
Even in the current “low employment, low layoffs” environment, most economists remain optimistic about the labor market.
Claudia Sahm, chief economist at New Century Advisors, told CNBC on Friday that while it’s “healthy” to discuss the potential impact of AI, it’s important not to overextend the decisions of individual companies.
“I’m not going to extrapolate the entire U.S. economy from the bloc,” Sahm said. “It’s important to understand these AI tools. The direction we move forward with them really depends on leadership. Automation and mass layoffs are not necessarily the only path forward.”
Broader impact of AI
A widely discussed speech by Federal Reserve President Christopher Waller earlier this week also highlighted the challenges and opportunities presented by AI.
In discussing the Fed’s internal use of technology, Waller said AI is more likely to increase productivity than eliminate jobs altogether.
“When ATMs were first introduced, bank tellers were not eliminated; instead, the way banking worked changed,” he said. “The real impact wasn’t just automation; it was how organizations were reorganized around technology. AI is no different. The biggest gains don’t just come from adding AI to existing processes. They come from rethinking workflows, roles, and systems.”
But even if layoffs aren’t widespread yet, and Dorsey’s warning doesn’t necessarily bode well, companies are starting to rethink how they allocate resources.
Although technology jobs only make up 5-7% of the workforce, AI technology itself is spreading across sectors.
Laura Ulrich, director of North American economic research at Indeed Hiring Lab, said “some jobs are likely to be disrupted by AI” as companies rethink the balance between workforce and technology.
“Companies are actually shifting investment away from labor and into capital investment,” Ulrich added. “They’re investing in AI in hopes that it will replace jobs.”
