US and Australian IT Firms Announce Successive Restructurings
Market Responds Positively to 'AI-Driven Efficiency'
Transformation of the Employment Landscape Accelerates
The American fintech company Block is implementing large-scale workforce reductions due to its use of artificial intelligence (AI) tools. The company announced plans to cut more than 4,000 employees out of its total workforce of 10,000. Block, a payments company, was founded by Twitter co-founder Jack Dorsey.
On February 27, Yonhap News, citing foreign media outlets such as Bloomberg and The Wall Street Journal (WSJ), reported that Block had internally notified its staff of the plan to lay off more than 4,000 employees.
US fintech company Block is undertaking large-scale workforce reductions due to the use of artificial intelligence (AI) tools. Photo by The Asia Business Daily
According to the reports, Jack Dorsey stated in a letter to shareholders that "with the use of AI tools, much smaller teams can accomplish more and do it better," emphasizing that the layoffs represent a structural change in the company's operational model rather than a simple cost-cutting measure. Dorsey said, "We are already witnessing the effectiveness of AI tools internally," and added, "Most companies are slow to recognize this shift." He further predicted, "Within the next year, the majority of companies will reach the same conclusion and implement similar structural changes." Importantly, he drew a line, saying that this decision was not due to a management crisis, and explained that instead of gradual reductions, the company chose "to acknowledge reality and act now."
The Market Cheers... Stock Price Surges 25%
According to Bloomberg, Block has been restructuring its business model and workforce since 2024. Following the layoff announcement, the company’s share price jumped more than 25% in after-hours trading. This can be interpreted as a sign that investors see the AI-driven organizational streamlining as a strategy for profitability improvement. Above all, Block is not alone in undertaking AI-driven restructuring.
The UK-based Financial Times described these layoffs as "one of the clearest signals yet of the broad changes that AI tools are bringing to employment." Previously, Australian logistics software company WiseTech Global also announced plans to cut around 2,000 jobs, about 30% of its workforce. The company’s senior management declared, "The era of coding by hand is over," formalizing the transition to AI-based automation.
Warnings of 'Mass Unemployment' by 2028
Meanwhile, a recent report released on Wall Street warned that disruptive innovation by AI could trigger mass unemployment and a financial crisis by 2028, sparking controversy. Although some economists have dismissed this as excessive pessimism, with major IT companies now carrying out large-scale layoffs, concerns about job insecurity are growing.
Recently on Wall Street, a report suggesting that disruptive innovation by AI could trigger massive unemployment and a financial crisis by 2028 was released, sparking controversy. Photo by Reuters-Yonhap News Agency
Most notably, whereas expanding the workforce was traditionally the standard way to grow a business, in the future, it is highly likely that a structure in which a small, elite workforce achieves much higher productivity through AI will become the norm. In particular, experts note that this shift is different from past industrial revolutions, as it directly affects not only manufacturing but also software and white-collar jobs.
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