Backlash Over 'AI-Washing' in Corporate Layoffs
Block, Inc. CEO Jack Dorsey is facing internal dissent after mass layoffs were coupled with mandates requiring remaining employees to integrate AI into their workflows. The practice of using AI as a justification for job cuts has been termed "AI-washing" by critics, including OpenAI CEO Sam Altman, who warned it erodes trust and misrepresents genuine AI-driven transformation.
- The "rolling layoffs" at Block, which could impact up to 10% of the company's workforce, are being conducted over several weeks, creating what some employees have described as a culture of "performance anxiety" and deteriorating morale. - Remaining employees at Block are now required to use generative AI tools daily, a mandate that some staff have criticized as a "top-down" directive that has led to frustration. Jack Dorsey, Block's CEO, reportedly uses generative AI to summarize the weekly update emails he requires from his staff. - Block has been developing an internal, open-source AI assistant called "Goose," which is designed to save employees 8 to 10 hours per week by handling tasks like organizing files and writing code. The company's goal is to make "Goose" the primary interface for all internal functions. - The practice of citing AI as a reason for layoffs has been termed "AI-washing" by critics, who argue it can be a way for companies to frame cost-cutting measures, driven by over-hiring or restructuring, as a forward-looking technology strategy. - This trend extends beyond Block, with companies like UPS and Chegg also announcing significant workforce reductions while referencing AI. UPS planned to cut 20,000 jobs, citing new technologies like machine learning, while Chegg laid off 45% of its staff due to declining revenue linked to the rise of generative AI tools. - Despite the narrative of AI-driven job cuts, some analysts are skeptical, pointing out that many companies do not yet have mature AI applications ready to replace the roles being eliminated. In 2025, AI was cited as a reason for over 54,000 layoffs in the U.S. - The push for AI integration at Block is part of a broader strategy to enhance operational efficiency, with analysts estimating the workforce reduction could save the company up to $235 million annually. - The long-term impact of AI on the job market remains a subject of debate, with some experts predicting that AI will create more jobs than it eliminates, while others warn of significant displacement in roles with repetitive tasks.
