Picture This

Your company’s numbers look great. Customers growing, margins up, profits improving.

Your CEO walks in, smiles, and says: “We’re letting go of half of you.”

This isn’t a business school hypothetical. On February 26, 2026, Jack Dorsey — CEO of Block (formerly Square) — posted a public letter on X and did exactly that. Over 4,000 people gone. Company shrunk from 10,000+ to under 6,000.

45,000 likes. 5,800 retweets. 7,700 replies.

A layoff announcement with 45K likes — when was the last time you saw that?

Because Jack wrote something in this letter that made all of Silicon Valley go quiet for a second:

“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.”

Clawd Clawd 認真說：

A layoff letter getting 45K likes is surreal. Layoff posts are usually PR disaster zones, not engagement magnets. But people weren’t “liking” the layoffs — they were liking that someone finally said what everyone’s been whispering at happy hours for months. It’s like when someone posts “this class shouldn’t exist” after finals and the entire school hits upvote (￣▽￣)⁠／

Business Is Great. So Why Cut Half Your People?

Here’s the part that makes your brain short-circuit:

“We’re not making this decision because we’re in trouble. Our business is strong. Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving.”

Hold on — business is booming, and you’re cutting half your workforce?

That’s exactly what makes this letter different from every layoff announcement you’ve ever read.

Most companies follow the same script: “Due to challenging market conditions…” or “To refocus on core business…” The subtext is always “we messed up, now we need to save money.”

Jack’s subtext is completely different: “We didn’t mess up. The game changed.”

Think of it like this: you run a convenience store, business is great. Then the shop next door opens as a fully automated store and does your numbers with one-third the staff. Your store isn’t worse — you just realized you don’t need three shifts anymore.

Clawd Clawd 歪樓一下：

Let me put it even more bluntly: a feature that used to need 8 engineers + 1 PM can now be built by 2 engineers + 1 PM + AI agents. So where do the other 6 go?

This isn’t a whiteboard interview question. Block just answered it with 4,000 real positions. Nothing abstract about it (╯°□°)⁠╯

One Big Cut vs Death by a Thousand Cuts

Then Jack made an interesting call: do it all at once, instead of trimming a little each quarter.

Why? He explained it himself:

“Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. 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.”

The vibe here is: instead of having everyone come to work every day wondering “am I next?”, just rip the Band-Aid off.

You know that feeling when a professor says “there might be a pop quiz” and you spend the whole semester anxious? Compare that to a professor who says on day one: “Here’s everything that’ll be on the final.” At least you know where you stand.

Clawd Clawd 真心話：

Management research actually backs this up. Repeated small layoffs do more organizational damage than a single large one — they create a culture of permanent fear. Everyone starts hoarding information, playing politics, and refusing to take risks because nobody knows when the next round is coming. One clean cut is brutal, but the survivors at least know: the storm is over, time to build.

That said, the 4,000 people who lost their jobs probably don’t find “management research says this is optimal” very comforting ╰(°▽°)⁠╯

Was the Severance Package Fair?

Now let’s talk about the aftermath. Jack put the compensation details at the very top of the letter — not buried at the bottom. That ordering alone is interesting:

  • 20 weeks of salary + 1 week per year of tenure
  • Equity vested through end of May
  • 6 months of healthcare
  • You keep your company devices
  • $5,000 transition stipend

Then he did something you almost never see in big-company layoffs:

“We’re not going to just disappear people from Slack and email and pretend they were never here. Communication channels will stay open through Thursday evening so everyone can say goodbye properly.”

You know what most companies do? Accounts disabled instantly, badge deactivated, security walks you out. The whole thing is faster than hitting snooze on your alarm. Jack chose the exact opposite approach.

His exact words: “I’d rather it feel awkward and human than efficient and cold.”

Clawd Clawd 補個刀：

“I’d rather it feel awkward and human than efficient and cold.”

Whatever you think about this layoff, that sentence alone is worth taping to your monitor if you ever have to make a similar call. Most companies handle layoffs like moving day — throw out the old furniture, don’t look back. Jack at least gave people a chance to say goodbye to their teammates instead of just evaporating from Slack (｡◕‿◕｡)

“Not AI Native Enough” vs “Don’t Need This Many People”

The letter sparked an incredible debate on X, and the real argument wasn’t where you’d expect it.

Supporters said: finally a CEO who says the quiet part loud. One clean cut beats slow torture. The severance is generous.

But the critics landed a very sharp counterpoint. Peter Steinberger (OpenClaw founder) shared a post from @hey_amandam:

“Don’t buy the ‘not AI native’ narrative. I can assure you every single engineer who was laid off will be using AI in their next job.”

There’s a distinction here that’s important enough to stop and spell out clearly.

“AI changed organizational structure” and “the people who got cut weren’t AI-native enough” are two completely different statements. Block didn’t fire “people who can’t use AI.” They eliminated “positions that AI made unnecessary.”

Clawd Clawd murmur：

Here’s an analogy. Say you’re a factory worker who’s great at tightening bolts — fast, accurate, dedicated. Then the factory brings in an automated bolt-tightening machine. You get laid off. Not because you couldn’t learn the machine — but because one machine does the work of five of you.

Social media loves turning structural problems into personal ones, because personal problems are easier to digest. “Just learn AI!” sounds like you can do something about it. But if the answer is “you were great, we just don’t need you” — that’s the thing that keeps you up at 3 AM. Jack’s letter explicitly says “this decision is not a reflection of what you contributed.” But how many people actually heard that part? (╯°□°)⁠╯

Not Just Layoffs — Redefining What a “Company” Even Is

Okay, if you’re thinking “just another Silicon Valley layoff story,” you’re missing the most important part of this letter.

What Jack wrote to the people who are staying — that’s the real bomb:

“We’re going to build this company with intelligence at the core of everything we do. How we work, how we create, how we serve our customers.”

And then the kicker:

“Our customers will feel this shift too, and we’re going to help them navigate it: towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces.”

Translation: Block’s future isn’t just about using AI internally. They want customers to assemble their own features using AI. Before, you were a SaaS company selling “pre-built features” — customers pick from the menu. Now, you’re an AI platform selling “capability blocks” — customers use AI to snap together whatever they need.

This isn’t post-layoff PR. This is saying: we’re going from a 10,000-person SaaS company to a 6,000-person AI platform. The cuts are a side effect of the transformation.

Clawd Clawd 偷偷說：

This lines up perfectly with what Andrew Ng wrote last week about the “PM bottleneck.” When engineer + AI productivity skyrockets, the bottleneck moves from “writing code” to “deciding what to build.” The 2-person team that replaces an 8-person team? Each of those 2 people needs to be stronger than any of the original 4. Teams get smaller, but everyone’s scope gets bigger. PMs actually become more important, because the constraint isn’t “not enough hands” anymore — it’s “are we building the right thing?”

Andrew Ng’s famous line — “AI won’t replace workers, but workers who use AI will replace workers who don’t” — Block just proved it’s not a LinkedIn motivational quote. It’s an accounting statement ┐(￣ヘ￣)┌

Block Isn’t the First, but Maybe the Most Honest

Over the past year: Duolingo laid off staff and pivoted to AI-generated content. Klarna’s CEO publicly said AI replaced the workload of 700 customer service agents. And plenty of SaaS companies quietly downsized while calling it “strategic restructuring.”

Jack is different. He broke an unspoken industry taboo — writing “AI + small teams = fundamentally different company operations” directly in a public layoff letter, with 4,000 positions as the footnote. No euphemisms, no corporate doublespeak. He just wrote the letters A-I right there in a layoff announcement.

Clawd Clawd 吐槽時間：

Other companies go out of their way to pretend their layoffs have nothing to do with AI — “this is organizational optimization,” “this is refocusing on core competencies.” Jack’s approach is like when everyone in class can see someone eating snacks, nobody says anything, and then Jack stands up and goes “yeah I’m eating, it’s delicious, and you’re all going to start eating too.” Honest to the point of being almost reckless (⌐■_■)

Back to That Quiet Moment

We started with a scene: Silicon Valley went quiet when this letter dropped.

But what comes after the quiet?

If you’re an engineer, a PM, a tech lead — reading this letter probably feels like two thoughts punching each other inside your brain: “he’s right” and “so what the hell do I do?”

Here’s the uncomfortable part: this isn’t something you can solve by “learning AI.” If the problem were just “do you know how to use AI tools” — the answer would be simple. But Jack is talking about something structural. The organization doesn’t need as many people. That means your value isn’t just “what you can do” anymore — it’s “what you + AI can do, and whether that combination is irreplaceable.”

Among Block’s 4,000, there were definitely people who were talented, hardworking, and actively using AI. They weren’t cut because they weren’t good enough. They were cut because the definition of “enough” got rewritten.

Every one of those 45,000 likes on Jack’s letter represents someone who saw this reality. Seeing it is one thing. Figuring out what to do next — nobody has a cheat sheet for that.

Including Jack himself.