The announcement of Jack Dorsey of firing some 4.000 employees de Block and replace a good part of their work with systems of Artificial Intelligence It has become one of the most talked-about corporate episodes about the impact of artificial intelligence on employmentThe decision, communicated to the staff on February 26It has not been justified by a drop in revenue, but by a deliberate reconfiguration of the production model to rely on algorithms.
While the affected workers were trying to come to terms with the blow, the market reacted in the opposite direction: Block's shares soared around a 23% on after-hours transactionsThis stock market surge sends a clear message to other large technology and financial companies, also in Europe and SpainInvestors seem willing to reward staff reductions when they come wrapped in a narrative of AI-driven efficiency.
Block's radical change: half the squad out
In his internal memo, Dorsey explained that Block will move from something more than 10.000 employees a "just below" 6.000», which represents a cut close to 50% of the global workforceThe company, parent company of services such as Square, Cash App and projects linked to BitcoinThe company is not experiencing a crisis in its results; in fact, it is profitable and maintains reasonable growth. According to the CEO himself, the move stems from the conviction that a much smaller team that relies on AI can produce more and with higher quality.
Dorsey's message was unusually direct by corporate standards. Instead of wrapping the adjustment in euphemisms, he admitted that AI not only helps workers, but in many cases... directly replacesThe underlying idea is that "human capital" is shifting from being an asset to becoming a commodity. cost to be optimized through automationSomething other executives think but rarely verbalize in public.
Block had already implemented several cuts in recent years after having oversized its workforce during the pandemicThis dynamic was also seen in other Wall Street tech companies. However, the scale of this latest restructuring, explicitly linked to AI, marks a qualitative leap and positions it as a benchmark for the rest of the sector.
Dorsey emphasized to analysts that he doesn't believe Block is an exception, but rather the vanguard of a broader change: he anticipates that Many large companies will replicate similar adjustments. in the coming months, relying on the same argument of intelligent automation.
The wave of AI-related layoffs: from Silicon Valley to the rest of the world
Block's case fits into a global trend of job cuts linked, more or less directly, to artificial intelligence. Large corporations such as Amazon, Pinterest, Salesforce, Duolingo or chemistry Dow They have announced mass layoffs in recent months, arguing the need to gain efficiency through automated tools.
Even companies less associated with the purely digital world, such as DowThey have eliminated several thousand jobs by relying on industrial automation. The message that is resonating, also within the European business community, is that No sector is immune to this wavefrom software platforms to traditional industry.
Figures from outplacement and labor market analysis consultancies reinforce the feeling of a changing cycle. Challenger, Gray & Christmas estimates that in just 2025 Some were explicitly attributed to AI 55.000 layoffsmultiplying by more than twelve the figure from two years earlier. And the start of 2026 It has resulted in approximately 26.000 technology jobs eliminated In the first few weeks, many of them were justified by automation strategies.
This situation is not unique to Europe. Although the pace of cuts is more moderate than in the United States, banks, insurers, and large technology companies with a presence in Europe are also facing challenges. Spain, France or Germany They have already begun reorganize teams and freeze hiring in areas they consider automatable in the short term.
AI as an alibi: the rise of so-called "AI washing"
An uncomfortable doubt hangs over this wave: Are companies laying off employees because of what AI is already doing, or because of what they expect it to do? Several academics and analysts argue that many of these decisions are based more on expectations than on measured results. Professor Ethan Mollick, from the business school of WhartonHe considers it difficult to justify, with current technology, 50% efficiency gains on the scale of an entire organization, such as those implicitly assumed in cases like Block's.
A recent study published in Harvard Business Review It points in the same direction: many companies would be adjusting templates based on the future potential of AIwithout yet having fully deployed systems that truly replace people on a large scale. In other words, they are cutting back before the technology has demonstrably reached the level of maturity they assume.
The consulting Gartner Research It provides a piece of information that dampens the enthusiasm: according to their estimates, only one in fifty AI investments It has a truly transformative impact on the business, and barely one in five It generates a clear and quantifiable return on investment. Even so, the narrative of the "leap to artificial intelligence" has become the perfect umbrella for aggressive restructurings.
Hence the term "AI washing", increasingly used in economic circles to describe the practice of to present cuts and adjustments as a result of AI when, in reality, they also respond to factors such as overhiring after the pandemic, pressure to improve margins, strategic changes, or simple planning errors. In cases like that of Meta, which laid off 600 employeesThe technology label softens the public perception of the layoffs and helps executives defend themselves before shareholders and public opinion.
Forrester, another analysis firm with an impact on the European market, also warns that around the 55% of employers that have already carried out AI-related layoffs acknowledges some degree of subsequent regretMany would be verifying that They have eliminated human capabilities that technology does not yet fully cover, forcing them to improvise organizational patches.
Fewer jobs, more work: the productivity paradox
Beyond the budget cuts, several academic studies are detecting a side effect that may also be felt in European offices: AI doesn't always reduces the workload, but the condenses and intensifiesResearch from universities such as UC Berkeley y YaleThese studies, cited again by Harvard Business Review, describe a recurring pattern: those who use AI tools manage to produce more, but end up assuming more functions and more responsibilities.
In practice, this means the company maintains or even increases its workload, but distributes it among fewer people through automation. Productivity per person skyrockets, but so do... Exhaustion, turnover, and the feeling of being constantly on the edgeIn environments where labor protection is weaker, such as some Anglo-Saxon markets, the impact is immediate; in regions with greater guarantees, such as the European Union, the shock may be more gradual, but the underlying trend is similar.
Trade unions and workers' organizations, including those in countries such as SpainThey are already talking about a kind of "digital factory"People monitoring automated processes, managing intelligent system incidents, and responding to a constant stream of interconnected tasks, where on some platforms AI moderators They have been laid off. Technology eliminates some of the manual effort, but it also reduces the downtime that previously allowed for some respite and space for creative thinking.
Data cited by some management experts suggests that generative AI tools allow, in many cases, to do the same job in half the timeBut far from automatically translating into shorter workdays, this increased efficiency is often used to add new tasks, new objectives, and new projects, raising the bar of what is considered "productive."
For workforces already strained by years of change, reorganization, and pressure to deliver results, this new level of demand can become an additional source of stress. The risk is that the rhetoric of technological modernization may mask a intensification of work difficult to sustain in the medium term.
Entry-level jobs at risk and a Generation Z without a gateway
One of the most delicate effects of this new paradigm is the erosion of the entry-level positionsRepetitive, structured, and relatively predictable tasks—those traditionally performed by junior profiles—are precisely the easiest to automate with available technology. This leaves many young people on the cusp of a job market where the learning steps are disappearing.
Analysts like those at Forrester They point to a striking paradox: Generation ZThe cohort most familiar with digital tools and most willing to work with AI is also the one that encounters fewer formal opportunities to start their career. Without those first years in entry-level positions, it is more difficult to acquire judgment, practical experience, and the ability to later supervise the automated systems themselves.
In markets like Spain, where youth unemployment is already structurally high, the disappearance of some of these entry-level jobs may to worsen the problems of labor market integrationService sectors, administrative roles, and increasingly, software development tasks, are experiencing similar pressures: the most routine jobs are being transformed or reduced, while highly specialized positions are being reserved for a more limited number of professionals.
Technology talent specialists insist that AI still It is not capable of replacing critical thinking, the understanding of social contexts or the making of complex decisions. However, they recognize that most of the Junior programming and support roles They are among the most exposed, something that is already being detected in multinationals with a presence in Europe and in technology consultancies that operate in Spain.
This gap forces us to rethink both the university and professional training such as active employment policies. The key, many experts agree, lies in strengthening analytical skills, creativity, project management, and interpersonal skills—aspects where technology still cannot compete on equal footing with people.
Offshoring, cost savings, and medium-term uncertainties
Behind the media spotlight on AI lies another phenomenon that worries European regulators: the possible combination of automation with offshoring of jobsThe thesis of firms like Forrester is that a significant portion of the jobs eliminated under the label of "layoffs due to AI" could reappear later in the form of rehiring in lower-cost markets.
The scheme would be as follows: the company breaks down the processes into simple tasks, supported by language models and other intelligent tools, and then transfers some of that work to countries with lower wagesIn this way, the organization reduces costs in two ways: it lays off higher-cost local staff and reconfigures the work so that it can be performed by fewer people or from cheaper regions.
These types of movements are not new, but AI acts as accelerator and facilitatorBy standardizing processes, documenting workflows, and automating segments, it becomes easier to distribute work across the map. For advanced economies like Spain or Germany, this can mean added pressure on the average wages and the stability of skilled employment.
In the short term, cuts like Block's generate significant cost savingswhich some analysts estimate at hundreds or even billions of dollars annually for the big tech companies. This positive impact on earnings explains some of the market enthusiasm. The question is whether, in the medium and long term, the loss of human capital and experience will not end up taking its toll in the form of less innovation capacity and more dependence on external software and service providers.
For human resources managers in Europe, the dilemma lies in finding a balance between technology adoption and talent preservationIntensive adoption of AI can improve margins and competitiveness, but taken to extremes there is a risk of leaving organizations without the profiles capable of making a difference when technology alone is not enough.
What happened in Block illustrates the extent to which the Artificial intelligence has become a lever for redesigning entire companies.Even when their accounts show no signs of weakness. The euphoric market reaction to the 4.000 layoffs indicates that capital seems to be clearly favoring algorithmic efficiency, even at a high social cost. As this logic spreads to other companies in the United States and Europe—including those operating in Spain—the debate will no longer be solely technological, but also labor-related and political: how to leverage AI capabilities without undermining access to employment, workforce well-being, and the cohesion of a professional middle class that sees its foundations crumbling.
