Could Block’s AI-fueled layoffs be a ‘tipping point’ for white-collar jobs?

Experts say Jack Dorsey's acknowledgement that AI is fueling layoffs could be a tipping point that sees a spike in companies taking the same approach.

This week’s announcement by Jack Dorsey that his financial tech company Block would lay off 40 per cent of its staff due to artificial intelligence saw the firm’s stock price skyrocket — an event that could signal a “tipping point” in the labour market, experts say.

While companies like Amazon have been steadily — but quietly — replacing workers with AI systems for several months now, Dorsey’s statement made the connection between the two explicit.

“Intelligence tools have changed what it means to build and run a company,” the CEO said in a letter to investors while announcing Block’s latest profit results. “We’re already seeing it internally. A significantly smaller team, using the tools we’re building, can do more and do it better.”

The co-founder of Twitter also said, “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.”

Moshe Lander, an economics professor at Concordia University, said Dorsey’s statement is an acknowledgment that we’re now at the latest stage of a trajectory that began decades ago, with automation in manufacturing and service industries.

That trend-line is now due to accelerate rapidly as AI makes a similar impact in white-collar jobs, he said in an interview.

“Think of it as hockey stick,” he explained.

“If you work your way up the shaft, it’s kind of that slow progression until you get to that connection point between the blade and the shaft — and then it takes off.”