Last week Block announced a stunning 40% layoff from its workforce. In an X post, Dorsey said intelligence tools the company deployed “fundamentally changes what it means to build and run a company”.
Other companies like Pinterest, CrowdStrike and Chegg have also recently announced job cuts and directly attributed the layoffs to AI reshaping their workforce.
The biggest risk here isn’t the headcount reduction. It’s what happens to the people who stay. Nobody wants to work for a company that claims to be thriving while axing four out of every ten colleagues. The constant threat of being next kills morale faster than any restructuring fixes it.
Here’s the dirty little secret: companies have always done this. The excuse changes, but the reasons don’t. In 1999, it was the Internet. In 2008 it was the recession. In 2020 it was COVID, last year it was “restructuring.” Now it’s AI. Every time, CEOs shout “They made us do it”.
I’ve worked with big companies, both as an employee and as a consultant for nearly two decades. I’ve sat in the meetings where companies construct the story for cuts that were really about years of over-hiring and cutting bloated salaries.
By blaming AI, the message becomes: it’s not us, it’s them.
Yes, AI is changing how we work. Some roles will evolve significantly and some will be automated.
Here’s the good news: AI is making the pie bigger and we’ll be seeing more jobs and new roles that require human labor. My prediction is that the companies that cut aggressively now will be rehiring in 6-12 months. Now is the time to start preparing.