- Jack Dorsey says smaller teams and artificial intelligence are more effective than all-human teams
- 4,000 workers risk losing their jobs, around 40% of the company’s workforce
- Dorsey sees artificial intelligence increasing the company’s speed and agility
Block has laid out plans to cut more than 4,000 jobs, marking a nearly 40% reduction from around 10,000 employees (according to its latest quarterly report) to less than 6,000 employees.
The company’s CEO and Twitter co-founder Jack Dorsey explained that the drastic decision does not come as an alarmed response to economic struggles, but rather a recognition that AI tools can significantly increase efficiency and reduce the number of workers it needs.
And this much is clear – the company had a healthy 24% year-on-year growth in gross profit.
Jack Dorsey replaces 40% of workers with artificial intelligence
Dorsey also reportedly decided to make a big cut, instead of announcing multiple rounds of layoffs, in a “one and done” approach rather than continuous blows to worker morale. Although the 40% reduction has certainly not gone unnoticed.
Block expects to incur about $450-500 million in costs associated with the restructuring, with severance packages that include at least 20 weeks of pay, a $5,000 severance payment and more.
As for the company’s restructuring, Block is going all-in on agent AI. “A significantly smaller team using the tools we’re building can do more and do it better,” Dorsey wrote in a letter to workers and shareholders.
Dorsey explained that “intelligence will be at the heart of how the entire business operates,” from making decisions and managing risk to building products and serving customers. He also noted AI’s impact on business speed in his letter, suggesting that leaner teams and faster AI systems could increase agility.
Removing unnecessary layers of management will certainly help with that, and it’s a step already taken by Amazon, Google and Microsoft.
Shares of the company rose as much as 26% in after-hours trading before falling slightly, though they are still significantly off the highs of early and mid-2021.
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews and opinions in your feeds. Be sure to click the Follow button!
And of course you can too follow TechRadar on TikTok for news, reviews, video unboxings, and get regular updates from us on WhatsApp also.
