3 questions every CEO needs to ask about the AI jobs doom loom in the wake of Jack Dorsey's dramatic 40% layoffs at Block | Fortune

"Dorsey made it clear that 'the business is strong' and 'intelligence tools' were changing the way they could work. When commenters pointed out the bloat he'd created during Covid, Dorsey admitted that he'd over-hired but said those issues were addressed two years ago. And he gave numbers, saying he's targeting $2 million+ gross profit per person vs. $500,000 from 2019 to 2024."

"Leadership expert Stephen Miles calls the move 'exceptionally executed,' and gives Dorsey kudos for courage, arguing that 'the amount of self-belief he has that the company can be even better with fewer people shows he's not being ruthless, just brutally honest about what's best for the future of the company.'"

"Dorsey claims that it's better to do one big cut as 'repeated rounds of cuts are destructive to morale.' On that point, he's right. A Careerminds study shows that serial layoffs are bad for morale and employee health. That said, big cuts can also be dumb cuts. Look no farther than X to see a shining example of how Elon Musk fired a bunch of people, only to then hire them back."

Block's CEO Jack Dorsey announced a 40% workforce reduction, causing stock to rise 17% despite the company's healthy growth. Dorsey attributed the layoffs to AI and intelligence tools enabling more efficient operations, targeting $2 million gross profit per person versus $500,000 previously. He acknowledged over-hiring during COVID but claimed those issues were resolved two years prior. Leadership experts praised the execution as honest about future company needs rather than ruthless. The move reignited discussions about AI's job impact. Dorsey advocated for one large layoff round over repeated cuts, citing morale damage from serial reductions. However, large cuts risk indiscriminate elimination of talent, as evidenced by Elon Musk's Twitter layoffs followed by rehiring.

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