Twitter co-founder Jack Dorsey announced that his technology firm Block is laying off nearly half its workforce, stating that artificial intelligence (AI) "fundamentally changes what it means to build and run a company."

"Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he wrote in a letter to shareholders.

The layoffs will reduce headcount at the company, which owns Square, CashApp, and Tidal, from 10,000 to under 6,000.

Block has conducted several rounds of layoffs since 2024, but this marks the first time it has cited AI as the reason for redundancies, representing the latest in a series of major job cuts in the tech industry.

At the end of January, Amazon laid off 16,000 employees, having already cut 14,000 roles a few months earlier.

In a subsequent call discussing financial results, Amazon's chief financial officer Brian Olsavsky said the company is looking at cost reductions elsewhere as it ramps up AI spending.

Meta, Microsoft, and Google have also laid off workers as their focus has shifted to significant investments in AI.

Meta's co-founder and chief executive Mark Zuckerberg said he expects "2026 to be the year that AI dramatically changes the way we work."

"We're starting to see projects that used to take big teams now be accomplished by a single, very talented person," Zuckerberg stated.

Most tech companies today use AI tools that automatically write the computer code required to operate software or websites, such as Claude Code from Anthropic or Codex from OpenAI.

This automation of work traditionally done by highly trained professionals has raised fears that AI will disrupt the job market.

However, some analysts have suggested that the immediate threat to jobs has been exaggerated by executives aiming to appear ahead of the curve.

According to Dorsey, more change related to AI capabilities is imminent.

"I don't think we're early to this realization," he said on Thursday. "I think most companies are late."

Block's financial report indicated strong demand for its products and services, boosting profits at the end of last year.

The firm also stated it will incur up to $500 million (£370 million) in restructuring costs as it pivots to the new strategy.

Its shares rose by over 20% in extended trading following the announcement.

Dorsey is a co-founder and former chief executive of Twitter, the online micro-messaging platform later acquired by Elon Musk and renamed X.

Source: www.bbc.com