Block Cuts 40%+ of Staff in AI Pivot
Jack Dorsey's Block has cut over 40% of its workforce in a radical bet on AI. Dorsey frames it not as a cost-cut but a reset for agility, stating "AI will do the trick" while simultaneously hiring senior AI engineers. It's a high-profile example of a major tech firm trading headcount for technical leverage.
The pivot isn't just talk; Block is actively hiring for specialized roles like "Staff AI Engineer, Applied AI" to build "agentic AI products for Square and Cash App." The focus is on moving beyond passive chatbots to systems that take autonomous action, with an obsession for real-world application over theoretical research. New hires are expected to build and deploy production-ready, LLM-powered autonomous agents and design rigorous evaluation frameworks from scratch. This transition is powered by an internal, open-source AI agent named "Goose," which reportedly saves employees 8 to 10 hours per week. Initially a side project by a single engineer, Goose is now used daily by the entire executive team, including Dorsey, to drive company-wide adoption. The company is seeing 20-25% of manual work hours saved, with the largest productivity gains surprisingly coming from non-technical teams like legal and operations. To accelerate this shift, Block launched an "Engineering AI Champions" program in 2025 with 50 developers from teams across Square, Cash App, and Afterpay. This group dedicates 30% of their time to embedding AI into their specific code repositories, creating repeatable agent workflows for tasks like generating API tests and refactoring legacy code. The goal is to make each codebase discoverable and maintainable by AI agents. This isn't Jack Dorsey's first major strategic pivot. He was famously forced out as CEO of Twitter in 2008 before returning in 2015. He co-founded Square in 2009 after his friend, a glassblower, lost a sale because he couldn't accept a credit card. That experience of building a company around a tangible problem shaped his approach. While the official narrative is AI-driven efficiency, Dorsey has also admitted to strategic missteps. He acknowledged overhiring during the pandemic, attributing it to building two separate company structures for Square and Cash App instead of a single, unified one. The company is now targeting a new efficiency goal: over $2 million in gross profit per employee, a fourfold increase from its pre-COVID levels. The developer community has met the news with a mix of interest and skepticism. Discussions on Hacker News question whether AI is a convenient "scapegoat" for correcting pandemic-era overhiring. Some developers argue that while AI tools are helpful, they don't yet replace the need for engineering judgment and that the 40% headcount reduction is more likely a cost-saving measure dressed in a futuristic narrative.
