Block Lays Off 4,000 Employees While Stock Jumps 24%: AI Used as an Excuse to Maximize Profits
Last week I read Jack Dorsey's announcement about the future of his company: Block is laying off almost half of its employees: over 4,000 people out of 10,000 total staff. And how did the market react that day? It celebrated with the stock soaring 24%. For layoffs, not for a new product, for positive financial results but for people losing their jobs.
Last spike in the chart happened with the layoffs announcement. Credits: www.cnbc.com
So I thought that maybe there were poor financial results behind this decision and instead, to my surprise, I read that Dorsey with total nonchalance explains that the business is doing very well, the company is fine, it has no problems, profits are increasing and customers are growing. But then what is to blame for these layoffs? AI. According to him, with AI tools smaller teams are enough.
Too bad that eleven months ago, there had already been layoffs, with just under a thousand people sent home. No blame on AI, but financial problems. Today they cut four times as many and the excuse has changed: AI that allows doing more with less. Bloomberg talks about “AI washing”. Even Sam Altman admits that companies use technology as a pretext to eliminate costs they would have cut anyway. So where is the truth? Would you trust and invest in this society?
What I see is the usual capitalist logic: human lives reduced to numbers, used as long as they serve to fatten the bosses and then thrown away at the first opportunity. But yes, in the end only profits matter while the dignity of people is shredded, right?
References: https://www.bbc.com/news/articles/cq570d12y9do
https://www.reddit.com/r/anticapitalism/comments/1ry1yvp/block_lays_off_4000_employees_while_stock_jumps/
https://www.reddit.com/r/LateStageCapitalism/comments/1ry8vz5/block_lays_off_4000_employees_while_stock_jumps/
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Have you heard that they in fact hired quite some people back? Seems it wasn’t that easy to replace everyone by AI that apruptly.
oh i haven't read that... AI is overrated for its actual status, glad some people got back their work
Was not many though, just a couple. But still. Some areas have years, maybe 1-2 decades until Ai really becomes a threat but its evolving. But coding and basic office work does not belong to that „safe haven“
https://finance.yahoo.com/news/block-rehiring-small-number-workers-083001190.html
Oh those seems like "politics" rehire
Layoffs, the Middle East, inflation. A combination is brewing that could lead to more serious problems. We'll see what happens.
AI is gonna bring a lot of layoffs, at least as excuse
now really this is troublesome for manpower sections of every country. Just state "AI" then fire somebody. The cruel reality.
Excellent post, on an excellent topic. A very interesting and timely analysis. It makes me reflect on how AI is often used as a justification, when in reality the focus is always on profit. It's a sensitive topic that deserves more attention, especially given its social and employment implications.