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

"We're not making this decision because we're in trouble. Our business is strong. Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. But something has changed. AI is unlocking a new way of working with smaller and flatter teams."

"We've seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time with agentic coding tools. AI tools have increased productivity at the company with a 40% increase in production code shipment per engineer since September."

"We see meaningful opportunity to invest in our people and invest in hiring, invest in retaining a world-class team to deliver for our customers; ultimately, we expect to hire some more senior AI engineering talent who will continue to level up our engineering and product capabilities."

Block, Jack Dorsey's fintech company, reduced its workforce from 10,000 to just under 6,000 employees on Thursday. Dorsey stated the company remains financially strong with growing gross profit and improving profitability. The layoffs stem from AI tools enabling new working methods with smaller, flatter teams. Since September, AI-powered agentic coding tools increased production code shipment per engineer by 40%, allowing engineering work previously requiring weeks to be completed by small teams in a fraction of the time. Despite the reductions, Block plans to hire senior AI engineering talent to enhance engineering and product capabilities. The company's stock rose nearly 23% in after-hours trading following the announcement.

Read at Business Insider