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Jack Dorsey lays off 4,000 employees, offers 20 weeks of salary as severance
Jack Dorsey’s Block cuts 4,000 jobs to pivot to an AI-driven future. The CEO says "intelligence tools" change how firms run.
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Jack Dorsey announced that his tech company Block is reducing its workforce “by nearly half” and cutting down 4,000 jobs. In a raw and transparent note shared with employees and later posted online, Dorsey revealed that the business is not in trouble and is strong, attributing the shift to increased creation, usage, and reliance on "intelligence tools." The founder detailed the severance package the company is offering, including 20 weeks of salary, while apologising to the affected employees for the "awkward and human" transition ahead.
Jack Dorsey’s note to the employees:
“Today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. That means over 4,000 of you are being asked to leave or entering into consultation. I'll be straight about what's happening, why, and what it means for everyone,” the Twitter (now X) co-founder wrote.
What is the severance package?
He explained, “First off, if you're one of the people affected, you'll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the U.S. you’ll receive similar support but exact details are going to vary based on local requirements). I want you to know that before anything else. Everyone will be notified today, whether you're being asked to leave, entering consultation, or asked to stay.”
Why lay off 4,000 employees?
Dorsey stated that it was not because the company was in trouble. He said, “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. We're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. And that's accelerating rapidly.”
Why lay off 40% workforce?
Dorsey said he chose a single, large-scale layoff over multiple smaller rounds of cuts to protect company morale and maintain stakeholder trust.
“I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead.”
He added, “I'd rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome. A smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures.”
The founder continued that though his decision at this scale carries risk, so does standing still.
“We've done a full review to determine the roles and people we require to reliably grow the business from here, and we've pressure-tested those decisions from multiple angles. I accept that we may have gotten some of them wrong, and we've built in flexibility to account for that, and do the right thing for our customers.”
Jack Dorsey to lay off employees:
Addressing those impacted by the decision, he said, “To those of you leaving… I'm grateful for you, and I'm sorry to put you through this. you built what this company is today. That's a fact that I'll honor forever. This decision is not a reflection of what you contributed. You will be a great contributor to any organization going forward.”
What did he say to those who are still employed?
“To those staying… I made this decision, and I'll own it. What I'm asking of you is to build with me. We're going to build this company with intelligence at the core of everything we do. How we work, how we create, how we serve our customers. Our customers will feel this shift too, and we're going to help them navigate it: towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces. That's what I'm focused on now. Expect a note from me tomorrow.”
He assured the affected employees that they wouldn’t be immediately removed from official channels and would have time to say their goodbyes.
“We're not going to just disappear people from slack and email and pretend they were never here. Communication channels will stay open through Thursday evening (pacific) so everyone can say goodbye properly, and share whatever you wish. I'll also be hosting a live video session to thank everyone at 3:35pm pacific. I know doing it this way might feel awkward. I'd rather it feel awkward and human than efficient and cold.”
