Written by: 0x2333, The BlockBeats
Last night, Jack Dorsey, founder of the U.S. payments company Block and the original founder of Twitter (acquired by Musk), released a company-wide letter that shocked Silicon Valley.
A 50% layoff, reducing the company of over 10,000 people to fewer than 6,000 almost instantly. But unlike Musk's swift decisiveness, Dorsey's compensation package is extremely generous—starting with 20 weeks of salary, six months of health insurance, and even a $5,000 "transition grant."
He even requested that Slack channels remain open until Thursday evening, allowing departing employees to say their goodbyes with dignity.
However, the capital market never believes in tears, only efficiency.
Almost simultaneously with the release of the company-wide letter, Block's stock price surged. Wall Street's logic is simple and cold. The market's enthusiastic feedback told this former Twitter founder: you did something extremely right, yet extremely cruel.
The core of Block's layoffs boils down to one thing: their internal AI tool, which they call "Goose."
If Klarna's 2024 layoffs targeted customer service, and Dell's 2025 layoffs targeted sales, then Block's 2026 earthquake directly shattered the rice bowls of engineers and project managers.
According to leaked technical details, Goose's "dimensionality reduction strike" against traditional large-company roles is reflected in three hardcore dimensions:
First, for coders: traditional AI assistants can only write code snippets. But Goose possesses "global read-write access" to Block's vast legacy codebase.
In the past, modifying a cross-border payment interface required meetings and alignment between payments, risk control, and settlement departments, with 5-8 engineers working for two weeks. With Goose, you input natural language, Goose automatically scans all microservices, identifies dependency conflicts, and directly generates a Pull Request. Those mid-level engineers responsible for "interface alignment" instantly lost their value.
Then, for operations: Block's payment business requires 24/7 uptime. Previously, this required a large-scale operations team working in shifts. Now, Goose can analyze logs 10 times faster than humans and autonomously execute rollbacks or scaling. This is essentially the "unattended" operations mentioned in Dorsey's letter.
The worst hit are project managers. Dorsey most detests "communication for communication's sake." The work of those middle-layer positions responsible for "translating" between customer requirements and development tasks is now done by Goose.
Block's layoffs can basically be defined as a milestone event for the AI industry in 2026.
Before this, people's perception of AI was still at the "tool" stage—improving individual efficiency, making one person do the work of two. But Block's case proves that what AI truly changes is a company's organizational structure. More cruelly, it provides tech giants with the perfect "fig leaf."
Rewind to 2020-2022. Amid the frenzy of the zero-interest-rate era, Silicon Valley fell into an irrational "hoarding race." By the end of 2019, Block's total headcount was less than 4,000. But in the subsequent three-year frenzy, that number skyrocketed to over 12,000, tripling in size. While blindly expanding, Dorsey also pushed through against opposition to acquire the streaming platform Tidal, unrelated to its core financial business, for nearly $300 million.
When the tide receded, the bloated size became the heaviest shackle for giants. How to cut these historical burdens without exposing strategic failure to the capital market? The answer is to tell a story of cost reduction and efficiency improvement using AI. The departure of these 4,000 employees not only buys out the "organizational debt" in one go but also means Block will directly save nearly $1 billion in massive annual operating expenses. After the purge, the remaining 6,000 employees will support the company's annual revenue exceeding $22 billion, pushing per-employee annual revenue creation to over $3.5 million. This is a model too sexy for even Wall Street to resist.
Packaging violent layoffs as an "organizational restructuring embracing AI" not only covers up management's past oversight in blind expansion but conveniently transforms the company into a pioneer of the new era. Wall Street doesn't need to追究 what mistakes were made in the past; seeing that saved $1 billion directly translate into next quarter's net profit expectations is enough to send the stock price soaring 24%.
As Shenyu, founder of Cobo, said: "What AI truly changes is not enhancing human skills, but changing company organizational structures."
From the blind expansion and strategic redundancy during the pandemic, to the small-scale trial targeting marketing and customer service in early February, to now using Goose to "halve" the core technical layer, Block has completely completed a transfer of power: a brutal paradigm shift from a "labor-intensive internet company" to an "AI-native logic company."
