Yesterday, Jack Dorsey announced that Block, the digital payments platform, is cutting over 4,000 jobs (a whopping 40% of its total workforce). Jack flat-out admits it’s AI:
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.
Jack Dorsey
It’s refreshing to hear an executive say out loud what so many others have been desperately trying to downplay, even if the reality is unnerving. It’s crystal clear that AI is impacting white-collar workers across a myriad of industries. Yet, you still find folks making lame deflections, arguing that the threat is overblown because we’re seeing strong job growth, or claiming AI will magically create entirely new fields of work overnight. What these deflectors usually fail to acknowledge is that the recent job growth is almost entirely coming from the healthcare sector. Strip that away and we’d be net negative on new jobs over the past year. Never mind the fact that entry-level roles for new grads are evaporating, pushing new grad unemployment steadily higher. Software engineering grads are getting hit particularly hard, currently sitting at a 7.8% unemployment rate right now.
I just don’t buy the narrative that everything will be hunky-dory because we’ll instantly invent a bunch of new job categories. Yes, the Industrial Revolution fundamentally changed work, but it took years to play out. Society had time to adjust to the technological advances. AI, on the other hand, is accelerating at a pace that people and our broader economic systems simply aren’t quick enough to react to. That is going to lead to a lot of real pain for folks in the short to medium term. We shouldn’t gloss over that with blind optimism. In time, it probably will be okay, but the real questions are how long will it take to get there, and can we withstand the rough road in the meantime?
I fully expect we’ll continue to see layoffs across sectors. Tech will take the brunt of it at first, but it will inevitably expand outward. If there’s a silver lining here, maybe Jack kicking the door open will finally force other companies to be a bit more transparent about what’s actually happening.