Twitter founder Jack Dorsey fired 4,000 people over AI and issued a warning to the business world.

On Thursday, February 26, Jack Dorsey cofounder of Twitter and CEO of Block, one of the world's largest digital payments companies published an internal memo that went viral within hours. Block, the company that operates Square, Cash App, and its Bitcoin ecosystem, was laying off more than 4,000 people: almost half of its global workforce. The stated reason wasn't a crisis. It was artificial intelligence.

"AI doesn't reduce work. It transforms it, accelerates it, and in the most honest cases, replaces it." Dorsey made this clear, while Block's stock rose 23% in after-hours trading. The market applauded. 4,000 people received their termination notices.

The Rise of AI-Driven Layoffs: Patterns and Numbers

Block isn't alone. Amazon has announced 30,000 layoffs in two waves over the past five months, citing AI efficiencies. Pinterest cut 15% of its workforce in January as part of a “strategic shift toward AI.” Salesforce reduced its support staff from 9,000 to 5,000. Duolingo terminated contracts with 10% of its employees because, according to its CEO, “AI can now handle translation tasks.” Dow, a chemical manufacturer not a tech startup eliminated 4,500 positions by accelerating its use of automation.

According to the outplacement firm Challenger, Gray & Christmas, by 2025 companies explicitly attributed 55,000 layoffs to AI more than 12 times the figure from two years prior. And 2026 began with 26,000 tech jobs eliminated in just the first few weeks of the year. The pattern is no longer anecdotal; it's a trend.

Layoffs due to current skills or promises of AI

Here's the question CEOs don't want to answer publicly: Are they making these decisions based on what AI has already demonstrated, or on what it promises to demonstrate?

Professor Ethan Mollick of Wharton argued that, given how new effective AI tools are, it's difficult to imagine a 50% efficiency gain at the enterprise level that would justify cuts of that magnitude. The Harvard Business Review published research in January 2026 with an uncomfortable conclusion: companies are laying off employees because of AI's potential, not its actual performance. And the technology consulting firm Gartner adds a statistic that should give any executive pause: only one in fifty AI investments generates transformational value. Only one in five generates any measurable return.

The research firm Forrester goes even further. It predicts that half of the layoffs attributed to AI will be followed by quiet rehires offshore, and with significantly lower salaries. 55% of employers who have already laid off staff due to AI report regret. They are discovering that they laid people off to fill roles that AI doesn't yet have.

There's a term for this: AI washing. Using AI as a narrative alibi for cuts that, in many cases, are a response to post-pandemic overhiring, margin pressure, or strategic reorientation. AI is a convenient justification because it sounds like the future, not failure.

Dorsey's explicit warning and the impact on employment

Dorsey was explicit about something almost no CEO dares to say: “I don't think we're the first to reach this conclusion. I think most companies are late to the game. Within the next year, I think most will make similar structural changes. I'd rather get there honestly and on my own terms than be forced to do it reactively.”

If he's right and market behavior suggests investors think so we're witnessing the beginning of an unprecedented labor reconfiguration in peacetime. Not in decades. In months.

Harvard Business Review also recently published a study by UC Berkeley and Yale that adds another layer of complexity: AI doesn't reduce work, it intensifies it. Employees who adopt these tools don't work less, they work more, covering more roles and taking on tasks that previously justified a larger headcount. Productivity increases. But so do burnout, turnover, and the average quality of work.

And meanwhile, entry-level positions are disappearing. The jobs that a generation used to learn are being automated first because they are the most predictable. Gen Z the generation with the greatest capacity to work with AI, according to Forrester is also the one finding the fewest opportunities to enter the job market.

Block may be an outlier: a profitable company with solid growth that makes a decision from a position of strength, not crisis. Or it may be the first of many.