Jack Dorsey just laid off 40% of staff. He said he's still hiring AI engineers.

In a surprising shift, Jack Dorsey has announced a significant reduction in workforce at his fintech company, Block, slashing 40% of its employees. Despite this drastic measure, Dorsey remains optimistic about the future, emphasizing the need to hire more senior AI engineers during an earnings call last Thursday. The company's stock responded positively, soaring nearly 23% in after-hours trading. Dorsey revealed in a memo to staff that the workforce is being reduced from 10,000 to just under 6,000. He attributed this decision to AI's transformative impact on work dynamics, which he believes necessitates smaller, more agile teams. "We're not making this decision because we're in trouble. Our business is strong," he reassured employees. Dorsey noted that gross profits are on the rise, customer base is expanding, and overall profitability is improving. He elaborated on the substantial gains in productivity resulting from AI integration, reporting a 40% increase in code production per engineer since September. Dorsey highlighted how tasks that once took weeks to finish are now completed in a fraction of the time thanks to advanced coding tools. Despite the layoffs, he expressed a commitment to investing in talent, stating, "We see meaningful opportunity to invest in our people and hire world-class talent to enhance our engineering and product capabilities." AI's influence is increasingly evident across various sectors, prompting companies to explore automation solutions. Research from Stanford University indicates that entry-level positions in software engineering and customer service are dwindling, with some workers reporting heightened responsibilities due to AI. A software engineer shared concerns about the dual pressures of increased productivity and workload, describing it as leading to "AI fatigue."