Are Dorsey’s giant job cuts the start of an AI jobs apocalypse? Economists weigh in
Block CEO Jack Dorsey’s move to cut nearly half of the company’s workforce sheds light on a growing question for corporate America: Will advances in artificial intelligence ultimately mean fewer workers?
On Thursday’s earnings call, Dorsey said Block would lay off about 4,000 people.
Dorsey called the move more than just a cost-cutting exercise; Instead, he explained, there is a shift in the way companies operate, with AI becoming more central to business decisions.
He also suggested that other companies would follow suit.
“I don’t think we’re too early to realize this. I think most companies are too late,” he said. “I believe that within the next year the majority of companies will reach the same conclusion and make similar structural changes. I would prefer to get there honestly and on our own terms rather than being forced to do so reactively.”
But economists question whether such moves point to a broader shift in the labor market or simply reflect company-specific adjustments.
“This is a function of lax decisions during a period of rapid expansion and subsequent contraction,” said RSM chief economist Joseph Brusuelas. “This must be understood within the specific context of the firm and does not signal risk to the broader U.S. labor market.”
Doubts about affairs
The layoffs come at a time of broader questions about the employment picture.
Although layoffs remain low and the unemployment rate remains at a relatively healthy 4.3%, job openings have narrowed sharply and hiring remains largely flat in 2025; average employment growth was only 15,000.
Still, the technology-related picture looks relatively healthy.
The information sector, which is a representative of the technology industry, unemployment rate In January, it fell to 5%, a 0.7 point decrease compared to the previous year. Job opportunities in the sector have decreased, but demand for some positions remains strong: Postings in software development are up 12% compared to a year ago. Actually.
Most economists remain optimistic about the labor market, even in the current “low hiring, low fever” environment.
Claudia Sahm, chief economist at New Century Advisors, said on CNBC on Friday that it’s “healthy” to discuss the potential impact of artificial intelligence, but it’s important not to over-interpret individual company decisions.
“I’m not going to draw conclusions from Block about the entire US economy,” Sahm said. “It’s important to understand that these AI tools, the direction you go with them, really depends on the leadership. Automation and mass layoffs may not be the only way forward.”
The broad impact of artificial intelligence
A much debated speech earlier this week Federal Reserve Governor Christopher Waller also highlighted the challenges and opportunities presented by artificial intelligence.
When discussing the Fed’s internal use of the technology, Waller said AI is more likely to increase productivity rather than eliminate jobs altogether.
“When ATMs were first introduced, they did not eliminate bank tellers. Instead, they changed the way banking works,” he said. “The real impact wasn’t just automation; it was how organizations reorganized around technology. AI is similar. The biggest gains won’t come from just adding AI to existing processes. They will come from rethinking workflows, roles, and systems.”
But while layoffs aren’t yet widespread (Dorsey’s warnings may not always be widely heralded) companies like that We’re starting to rethink how they allocate resources.
Technology jobs make up only 5% to 7% of the total workforce, but AI technology is spreading far beyond the industry.
“Some jobs are likely to be disrupted by AI as companies reevaluate the balance between workforce and technology,” said Laura Ullrich, Indeed Hiring Lab’s director of North American economic research.
“Companies are shifting their investments toward capital expenditures rather than labor,” Ullrich added. “They are investing in AI in the hope that it can replace jobs.”
