Jack Dorsey Just Cut 4,000 People. Here's What Nobody's Talking About.

Jack Dorsey laid off nearly half of Block's workforce this week. Over 4,000 people gone in a single memo. And the stock jumped 20%.

Jack Dorsey Looking Into the Future

That should tell you everything you need to know about where the market is headed.

Block is profitable. Revenue is growing. Dorsey didn't do this because the business is struggling. He did it because he sees something.

He's forcing the transition while other companies are still trimming around the edges; 5% here, 10% there, death by a thousand cuts. Dorsey ripped the bandaid off. 40% in one shot. And he told shareholders that most companies will reach the same conclusion within a year.

I think he's right. But not for the reason most people think.

The Real Pressure Is Coming From Below

Everyone's focused on AI replacing workers. That's part of it. But there's a bigger force at play that nobody seems to be talking about.

SaaS is getting disrupted from the bottom up.

I just built my own CRM. Not bought, built. Right now I'm building a full recruiting system. It'll take us three to four weeks. We're using packaged AI to scan resumes and run interviews, wiring it all into automated workflows, and storing everything in a Supabase database that costs $50 a month.

I don't need the ATS anymore. I don't need the CRM anymore. I just have my own.

And I'm not special. Young startups everywhere are grabbing Airtable templates and doing the same thing. The barrier to building your own internal tools has essentially disappeared.

What This Means for the SaaS Sector

When companies can build their own tools in weeks instead of signing six-figure SaaS contracts, the math changes fast. Pricing pressure. Margin compression. And eventually, headcount reduction.

That's why Salesforce, Workday, and the rest of the SaaS sector are getting hammered in the market right now. Investors see it coming. Dorsey sees it too. The difference is he's not waiting, he's forcing it.

It feels early, honestly. But he's clearly seeing something internally that tells him he doesn't need that many people anymore. And when a forward-thinking CEO makes a move this aggressive while the business is healthy, you pay attention.

Why Jack Dorsey Made One Big Cut Instead of a Slow Bleed?

My partner Dr. Brooks Holtom, a professor of management at Georgetown University, was quoted in Business Insider on this very topic. His take: the research says doing it all at once is actually better than the slow drip approach. Repeated rounds of cuts create layoff fatigue and chronic anxiety. People spend all their energy wondering if they're next instead of doing their best work. One clean cut lets the organization grieve, reset, and move forward.

That said, the scale is extreme. 40% is not normal. But Dorsey paired it with a generous severance package worth 20 weeks of pay plus a week per year of tenure, six months of healthcare, continued equity vesting, and employees keep their devices. The message was empathetic and direct. Dr. Holtom noted that the tone of the memo was aligned with what good management research recommends. You can disagree with the decision, but you can't say it wasn't handled thoughtfully.

Welcome to the 50/50 Era

This is exactly why I believe we're entering what I call the 50/50 Era. Leaders aren't just managing people anymore. They're managing people and machines. Your workforce is becoming a hybrid of humans and AI systems, and the leadership skills required to run that kind of organization are fundamentally different from what got you here.

Dorsey said it himself: "I'd rather get there honestly and on our own terms than be forced into it reactively."

The question isn't whether this is coming to your company. The question is whether you'll be ready to lead through it when it does.

If you're a leader who wants to get ahead of this shift, that's exactly what we're building at AI Officer. Our Leadership in the AI Era program prepares leaders to manage hybrid teams of people and AI, not by teaching you to code, but by developing the leadership skills this new era demands.