Block’s Layoffs: Validating the Citrini Thesis, or Solving for Gross Mismanagement?

Last week, Jack Dorsey, CEO of Block, Inc., announced the company is laying off a whopping 40% of its workforce, more than 4,000 employees. Coming on the heels of the Citrini Memo, it is difficult not to at least consider the parallels between Block’s actions and the fictional scenarios portrayed therein. Indeed, Dorsey’s commentary on the matter reads as if taken directly from Citrini’s dystopian narrative:

“The core thesis is simple. Intelligence tools have changed what it means to build and run a company. I don’t think we’re early to this realization. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”

In the aftermath of this announcement, a number of people, including former Block employees, have argued the layoffs are really about eliminating corporate bloat. AI, they suggest, is simply a convenient narrative that creates better optics by making the company appear to be getting ahead of a meaningful trend, rather than correcting for poor management decisions that resulted in massive overhiring.

I have questions.

If Dorsey’s stated case for the layoffs is valid, does this not align squarely (pun intended) with Citrini’s doomsday scenario? Alternatively, if this is really about correcting corporate bloat, how did Block management get so far off track as to add 40% more employees than necessary to run the company effectively?

To be sure, Dorsey makes clear that “gross profit more than doubled from the first quarter to the fourth quarter of 2025.” He goes on to write, “We believe this financial performance is just beginning to reflect the product development velocity improvements we drove this year.”

Is it possible Block generated $2.87 billion in profit while carrying $235 million in excess labor spend? Or is it more plausible that AI has already automated workflows that previously required large teams, making certain roles expendable?

The answer may lie somewhere in the middle. Yes, Block likely over hired. And yes, AI may now be enabling the company to automate work previously done by humans.

Either way, we will all be watching closely for signs that Dorsey’s prediction proves correct: that “the majority of companies will reach the same conclusion and make similar structural changes.”

One thing is certain. If AI-driven workforce reductions approach anything close to the scale of Block’s recent layoffs, and if similar levels of job elimination become commonplace, we should all be concerned.