Block Inc. disclosed on Thursday that it will reduce its workforce by 40% as it pivots toward what CEO Jack Dorsey termed an "AI-native future." The timing of the announcement - less than a week after a widely shared research scenario exploring widespread AI-driven job displacement - intensified scrutiny of the companys strategy and the broader economic questions it raises.
The research scenario that gained traction earlier in the week was produced by Citrini Research and circulated on Monday. Framed from a hypothetical vantage point in June 2028, the paper sketched a world in which accelerating AI capabilities produce significant white-collar job losses and posited a possible unemployment rate of 10.2% in that hypothetical scenario.
The Citrini analysis highlighted a pattern of job reductions concentrated among white-collar workers who account for a disproportionate share of consumer spending. It also described potential knock-on effects through private credit markets and flagged concerns about assumptions used in mortgage underwriting in that hypothetical future.
Responses to the Citrini scenario were swift and critical. Wharton Professor Jeremy Siegel dismissed the analysis, writing that "such a prediction has no historical or economic basis." Siegel argued that, instead of precipitating broad economic decline, AI will bring about the biggest rise in living standards since the Industrial Revolution.
Citadel Securities also disputed the scenario. Macro strategist Frank Flight wrote on Tuesday that historical experience with successive waves of technological change does not support runaway exponential growth in disruption nor a future where labor becomes obsolete. A senior White House economist similarly described the Citrini paper as "science fiction."
In announcing the workforce reduction, Dorsey stressed that the move is not driven by business distress. He stated the company remains strong: gross profit is continuing to grow, the user base is expanding, and profitability is improving. According to Dorsey, the companys own intelligence tools, combined with flatter and smaller organizational structures, are ushering in a fundamentally different approach to building and operating the business.
Dorsey framed the decision as a choice between two paths: trimming staff gradually over months or years as the shift unfolds, or moving decisively now. He argued that repeated rounds of layoffs would be damaging to morale, focus, and the trust that customers and shareholders place in Blocks leadership.
Analysts reacted to the announcement by noting both its promise and peril. Harshita Rawat, an analyst at Bernstein SocGen Group, wrote that the announcement "highlighted both the worst and the best of what AI could do with respect to unemployment and massive productivity gains."
Markets moved sharply on the development: shares of Block rose 20% on Friday following the announcement.
What remains unclear from the recent sequence of events is how representative Blocks decision may be of broader corporate behavior, and how rapidly technology-driven organizational changes will translate into labor-market outcomes. The companys leadership frames the cut as a strategic acceleration rather than a retrenchment, while critics point to the hypothetical scenario as a cautionary tale about concentrated consumer-spending losses and financial-sector vulnerabilities.
The unfolding debate underscores competing interpretations of how AI will reshape productivity, employment and financial stability - questions that market participants, policymakers and employers will continue to weigh as real-world corporate actions and speculative scenario analyses collide in public debate.