Block's AI Layoffs Backlash: Workers Reveal Why 'You Can't Really AI That'

Mark vividly recalls the moment he first questioned whether he was training Block's AI tools to eventually replace him. It was during the fintech company's lavish anniversary party last September. As executives showcased the productivity benefits of a new internal AI tool, Mark, a product department employee, confided in colleagues about his concerns. He reassured himself that, for now, the technology wasn't advanced enough to drive business vision and strategy without human input.

"You can't really AI that," Mark told the Guardian, emphasizing that an employee is more than just a series of tasks. Despite this belief, Mark was among roughly 4,000 Block employees laid off last week. CEO Jack Dorsey justified the cuts, which reduced the workforce by almost half, by citing gains in AI productivity. In a letter to shareholders, Dorsey stated, "A significantly smaller team, using the tools we're building, can do more and do it better."

However, seven current and recently laid-off workers interviewed by the Guardian challenged Dorsey's claims that AI tools can replace workers on such a scale. These employees, who requested anonymity to protect their jobs or severance, work across departments like engineering and product. While some acknowledged AI's helpfulness, many viewed the layoffs as a strategic move to boost investor confidence after Block's stock declined due to heavy investments in the volatile cryptocurrency market.

George, a current Block employee, described the layoffs as "posturing for the market," aimed at repositioning the company from crypto to AI. Block's stock did indeed rise following the announcement. In a recent Wired interview, Dorsey attributed the drastic cuts to a December shift in AI sophistication, including tools like Anthropic's Opus 4.6 and OpenAI's Codex 5.3. He dismissed claims of over-hiring during the pandemic and criticized traditional management hierarchies, expressing a goal for Block to "feel like a mini AGI."

Creating Their Own Replacements

Initially, Block encouraged employees to use AI more frequently. Over the past nine months, this shifted to a requirement, as revealed in a January internal all-hands meeting where Dorsey insisted, "The way we built things in the past is not going to work anymore." Some workers, including Mark, felt they were essentially building and training the tools meant to supplant them.

"The way in which they are using these tools as justification to fire half the company is ludicrous," Mark said. He likened it to a "thinly veiled attempt" to gather employee input on task automation, noting that these tools are "not even close to being all-encompassing of someone's job." Even employees heavily involved with AI, like John, remain skeptical. "We're just not there yet," John stated, highlighting the gap between technical possibilities and executive interpretations.

Block executives reported in an earnings call that AI has led to a "greater than 40% increase in production code shipped per engineer since September," with tasks that once took weeks now completed in a fraction of the time. However, John noted that 95% of AI-driven code changes still require human tweaks to meet company standards, and all changes need human approval before deployment.

The company monitors employees' AI usage down to specific tools and tokens, incorporating AI proficiency into performance evaluations. Liam, a laid-off software engineer, recalled pressure from his manager to use AI effectively, sensing that "if you weren't using AI, your job was in danger." This push has led to widespread AI fatigue, with workers like Carl avoiding the tools on ethical grounds, citing environmental harm from data centers.

Oliver, another laid-off worker, described increased friction as monitoring intensified, even when AI was less efficient for certain tasks. He and others pointed out that AI tools struggle in regulated areas like banking and money transfers, crucial for a fintech company. Naoko Takeda, a former data scientist at Block's Cash App, expressed "immense dread and survivor's guilt" in a viral LinkedIn post, criticizing the forced AI adoption and limited productivity gains that didn't justify mass layoffs.

Are Bots Bad for Business?

Beyond employee impact, Block's AI expansion may harm its business. George reported customer frustration with chatbots handling initial support requests, which have made "incredible mistakes," such as advising account closures. Carl added that customers dislike automated bots for serious issues, finding them frustrating and impersonal.

While AI boosts back-end productivity, workers note its lack of judgment and emotional intelligence. "It doesn't have discernment," Oliver remarked, comparing it to building without understanding architecture. Amid these challenges, remaining employees face quadrupled workloads and low morale, with internal Slack messages receiving negative reactions like thumbs-downs and clown faces. As Oliver summarized, "Everyone that I know that's still there has a ton of dread because they just realized their workload has quadrupled or 10xed and AI is not going to fix it."