Block, led by CEO Jack Dorsey has announced the most dramatic layoffs in recent times as the company has slashed around 40% jobs which is nearly half of its workforce in a single round of layoffs. From 10,000, the company's workforce has come down to 6,000. “Repeated rounds of layoffs are destructive to morale, focus, and to the trust of customers and shareholders. 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,” Jack Dorsey wrote in a post on X.
According to a letter to shareholders by co-founder Jack Dorsey, "intelligence tools" remain the key reason behind the layoffs. Dorsey thinks most companies will follow suit in the near future.
“A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week,” Dorsey wrote.
Over the past week, a highly speculative financial essay has captured attention on Wall Street. Titled “The 2028 Global Intelligence Crisis,” the viral piece by Citrini Research and Alap Shah imagines a dramatic economic collapse triggered by artificial intelligence.
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Written as a “macro memo from June 2028,” the essay describes a future where the S&P 500 has fallen 38%, unemployment has surged to 10.2%, and the U.S. economy has slipped into a deflationary spiral. According to the scenario, widespread AI-driven automation leads to massive displacement of white-collar workers, shaking markets and destabilizing the broader economy.
The paper explores a hypothetical doomsday scenario where rapid AI automation triggers mass unemployment and financial instability by 2028. It specifically warns that Indian IT giants like TCS, Infosys, and Wipro are at risk, as their business models face potential destruction from AI-driven automation.
"The entire model was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity," the report stated, adding that as services exports weaken, the rupee falls significantly against the dollar within four months.
"AI got better and cheaper. Companies laid off workers, then used the savings to buy more AI capability, which let them lay off more workers. Displaced workers spent less," it said. "Companies that sell things to consumers sold fewer of them, weakened, and invested more in AI to protect margins. AI got better and cheaper. A feedback loop with no natural brake."
"NVDA was still posting record revenues. TSM was still running at 95 per cent plus utilisation. The hyperscalers were still spending $150-200 billion per quarter on data centre capex. Economies that were purely convex to this trend, like Taiwan and Korea, outperformed massively."
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Most companies have attributed AI as the reason for the massive job cuts. The companies had rapidly expanded during the pandemic when demand for online services were at an all-time high. For instance, Block, Inc. grew from 3,835 employees at the end of 2019 to more than 10,000 before announcing its latest layoffs. Meta also nearly doubled its workforce within about two years during that period.
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These job cuts come as concerns grow over AI’s impact on the workforce and major AI firms such as Anthropic and OpenAI continue rolling out advanced enterprise tools.
This week, Anthropic upgraded its Claude model to improve performance in office-based roles such as human resources, design and wealth management. Earlier this month, software stocks fell sharply after Anthropic introduced updates to its Claude Cowork tool, highlighting investor anxiety about how AI could disrupt white-collar jobs.
According to a letter to shareholders by co-founder Jack Dorsey, "intelligence tools" remain the key reason behind the layoffs. Dorsey thinks most companies will follow suit in the near future.
“A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week,” Dorsey wrote.
Is the AI doomsday report coming true?
The job cuts at Block, the company behind Square, Cash App and Afterpay, come as AI has reshaped jobs across the tech sector and is raising concerns about the future of the job market. Companies like Amazon, Meta, Microsoft and Verizon have all made sweeping cuts in the last year tangentially related to AI.Over the past week, a highly speculative financial essay has captured attention on Wall Street. Titled “The 2028 Global Intelligence Crisis,” the viral piece by Citrini Research and Alap Shah imagines a dramatic economic collapse triggered by artificial intelligence.
ALSO READ: Rinku Singh's father, a LPG cylinder delivery man, used to beat him for playing cricket. But one incident changed everything
Written as a “macro memo from June 2028,” the essay describes a future where the S&P 500 has fallen 38%, unemployment has surged to 10.2%, and the U.S. economy has slipped into a deflationary spiral. According to the scenario, widespread AI-driven automation leads to massive displacement of white-collar workers, shaking markets and destabilizing the broader economy.
The paper explores a hypothetical doomsday scenario where rapid AI automation triggers mass unemployment and financial instability by 2028. It specifically warns that Indian IT giants like TCS, Infosys, and Wipro are at risk, as their business models face potential destruction from AI-driven automation.
"The entire model was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity," the report stated, adding that as services exports weaken, the rupee falls significantly against the dollar within four months.
"AI got better and cheaper. Companies laid off workers, then used the savings to buy more AI capability, which let them lay off more workers. Displaced workers spent less," it said. "Companies that sell things to consumers sold fewer of them, weakened, and invested more in AI to protect margins. AI got better and cheaper. A feedback loop with no natural brake."
"NVDA was still posting record revenues. TSM was still running at 95 per cent plus utilisation. The hyperscalers were still spending $150-200 billion per quarter on data centre capex. Economies that were purely convex to this trend, like Taiwan and Korea, outperformed massively."
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'Most companies late'
The co-founder of Twitter believes he’s ahead of the game. “I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively,” he wrote.Most companies have attributed AI as the reason for the massive job cuts. The companies had rapidly expanded during the pandemic when demand for online services were at an all-time high. For instance, Block, Inc. grew from 3,835 employees at the end of 2019 to more than 10,000 before announcing its latest layoffs. Meta also nearly doubled its workforce within about two years during that period.
ALSO READ: Nvidia CEO makes big remark on AI threat, Jensen Huang claims 'I think the markets got it...'
These job cuts come as concerns grow over AI’s impact on the workforce and major AI firms such as Anthropic and OpenAI continue rolling out advanced enterprise tools.
This week, Anthropic upgraded its Claude model to improve performance in office-based roles such as human resources, design and wealth management. Earlier this month, software stocks fell sharply after Anthropic introduced updates to its Claude Cowork tool, highlighting investor anxiety about how AI could disrupt white-collar jobs.