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In a week when the news gods give us a treasure trove of news, it’s a fool’s game to pick the biggest story.
Was it Trump’s unusual State of the Union address? Didn’t Nvidia’s incredible performance fail to answer the question of whether the hyperscaler’s huge splurge will pay big dividends in the future? With tensions rising between Iran and the US?
Let me play the fool for a moment, because I think the news from a mid-sized high-tech payments company has the potential to be a long-term shocker and a warning of far greater social upheaval than any other news this week.
The $33 billion block of companies soared in after-hours trading Thursday after Twitter Inc. co-founder and CEO Jack Dorsey announced to the market that he would lay off nearly half of his employees.
In a letter to shareholders, he said 4,000 of the 10,000 employees “have been asked to leave or are in discussions to leave the company.” Again, this represents almost half of his employees.
Block Chief Financial Officer Amrita Ahuja said the layoffs position the company for “the next phase of long-term growth.”
“We are choosing to change the way we operate now as our business accelerates and we see an opportunity to leverage AI to automate more tasks and move faster with smaller, better teams,” Ahuja wrote.
Layoffs happen all the time, but Dorsey’s comments should serve as a wake-up call for everyone.
He said he expects other companies to similarly rethink their workforces as they see the potential for efficiency gains from “intelligence tools.”
Please understand it well. Dorsey expects other companies to similarly rethink their workforces in hopes of improving efficiency through “intelligence tools.”
“Within the next year, the vast majority of companies will reach similar conclusions and make similar structural changes,” he wrote.
Try doing the math. The 10,000 jobs equate to just under 6,000 jobs and will be replicated in industries across the country and around the world.
In other words, new growth companies, not old economy companies, have just announced that they will drastically reduce their workforce as new intelligence tools become more widespread.
It is often said on CNBC that AI will create new jobs to replace those lost. I’ve been asking the same question for years. “What are those jobs? Where are the millions of bulk jobs whose roles are scheduled to become redundant?”
And I always hear the same old metaphor – “Oh, those jobs haven’t been created yet.”
I think it’s time to get a better answer, don’t you?
