Companies are lying about AI
In a Nutshell
Jack Dorsey's Block is laying off 40% of its workforce (from 13,000 to 6,000), vaguely citing "intelligence tools" (implying AI) as the reason, sparking a 23% after-hours stock surge and signaling a tech trend of shrinking teams for productivity gains, akin to Elon Musk's 80% Twitter cuts that revitalized X. This isn't an "AI pandemic" replacing humans—it's short-term experimentation amid capitalism's hire-fire cycles, with AI enabling humans to build vastly more software faster to meet infinite demand, ushering in a renaissance rather than decline. Long-term, software demand explodes as AI accelerates development from archaic paces to traversing an endless backlog, eating the universe with more people and tools integrated optimally.
These notes were generated by AI and may contain inaccuracies.
Jack Dorsey's Block (formerly Square), which makes cash registers that make everyone uncomfortable when the cashier says there's a question for you on the screen, released a memo reducing the organization from over 10,000 people to just under 6,000. That means 4,000 employees are being asked to leave. The memo says one word about why: 'We're already seeing that the intelligence tools we're creating'—no mention of AI, just 'intelligence tools.' Block is not training their own models paired with smaller and flatter teams.
This is the key unlock for companies when they are stuck. Shrinking teams makes them more productive—it's paradoxical but true. When you want to go fast, shrink your teams. When you want to grow, headcount. A lot of people are saying this is the AI pandemic. Balaji, who called the COVID pandemic early, is running the same play: 'This is the first AI cut and it will send shock waves.'
Jack Dorsey created Twitter, which was trash and stagnant with unwavering stock for over a decade. Elon Musk fired 80% of employees, and now X's algorithm is almost TikTok quality, homing in on interests, with creator payouts—all with 80% fewer employees. Jack cutting 40% headcount signals to tech: get good, become indispensable, work nights and weekends, learn AI tools, outsource work, raise your game or you might not make the cut as an employee or company.
Block's employee count: from 4,000 in December 2019 (beginning of COVID) to almost 13,000 in 2022. Robinhood has 2,500 employees and $70 billion market cap. Block has $30 billion market cap, cutting to 6,000 employees—almost triple Robinhood's. Jack blames it on AI so stock pumps 23% after hours. This is the most productive thing Jack has done as CEO. Stock at $54, high was $270 in 2021, downhill since. Jack has been a horrific operator, not legendary—otherwise no layoff.
'Intelligence tools'—carefully worded to allude to AI without saying it. Reactions say AI, Jack doesn't. Companies will experiment with smaller teams for short-term productivity gains, but eventually hire back as new status quo establishes rhythm. Then overhire, fire—cycle of capitalism. AI is perfect cover for layoffs with 20% stock bonus.
Not negative, honest. Vendetta against narrative that AI replaces humans. Pro-AI: humans + AI unstoppable, renaissance, highly prolific period. Analogy: if car invented, people wouldn't stop wanting to go places; if phone invented, wouldn't stop talking. We talk to computers in plain English—continuation of software eating the world, beginning not end.
AI builds horizontal software easily and quickly (vertical needs human precision). Demand for software won't go down. Software notoriously shitty: frustrating, limited, slow updates, bugs. AI allows building faster, better, more. Infinite backlog, customers reporting issues, things to build—ship only 1-2 major things/year. Vehicle to traverse software space faster—demand explodes.
2020s early archaic: one major feature/quarter. Infinite demand. Don't buy narrative that at moment we built vehicle to search software space, people won't want software. Short-term experimentation, mistakes find optimal integration.
Narratives on X: short-term messy, zigzag, but long-term smooths to more software, more people. Software permanent staple. No way to build all needed software without AI help. Software eating world since start, now eats universe. Day one of expansion, not AI pandemic. Short-term turbulence, long-term more software and people.
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