Are AI Job Cuts Really an ‘Inevitability’?

Following plans to cut 40% of its workforce, Block CFO and COO Amrita Ahuja has shared that she believes the fintech firm’s AI layoff strategy is an "inevitability" for many organisations. 

Speaking at the WSJ CEO Council Summit, Amrita said: “It feels like the acceleration is actually only quickening and we are seeing, really, an inevitability at this point around productivity gains and what that means for us as a business.”

The cuts, announced in February, are set to impact 4,000 jobs, with CEO Jack Dorsey describing it as a “difficult decision,” with AI tools changing “what it means to build and run a company.”

When asked if she believes other companies will follow a similar path, Amrita said: “I think it’s an inevitability. As a CFO, I think it’s better to be a little bit early than to be too late here.”

AI transformation in practice

Block’s job cuts followed a successful growth period for the business, with it seeing a 17% year-on-year growth in gross profit for 2025 – reaching US$10.36bn. 

According to comments made by Jack in a letter to shareholders, the decision to make these cuts came about because “a significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week.”

But some leaders disagree.

Oliver Shaw, CEO of Orgvue, told HR Chief: “Cutting 40% of your workforce in one fell swoop is a short-term reaction that ignores the long-term cost. 

“The institutional knowledge lost, the disruption to products like Cash App and Afterpay, the employees who declined severance because they felt dehumanised are the real story of what blunt-force transformation looks like in practice.”

Research from Orgvue finds that while 70% of executive leaders see redundancies as an easy response to market uncertainty, many senior managers believe these decisions damage employee trust – with research from Bain & Company finding that around 88% of transformations fail, often due to poor long-term planning. 

Oliver continued: “AI layoffs are not inevitable, poor leadership is what makes them feel that way. I'm sure Block will be hiring back these skills soon."

Are companies ‘AI washing’ their layoffs?

As AI-led layoffs increase – with research from Challenger, Gray and Christmas finding that AI was cited in 25% of job cutting announcements – some critics believe that many companies are ‘AI washing’ their layoffs. 

Sam Altman, CEO of OpenAI, shared at the AI Impact Summit in India that he thinks many organisations are blaming AI for workforce cuts, telling attendees: “I don’t know what the exact percentage is, but there’s some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there’s some real displacement by AI of different kinds of jobs”.

Venture capitalist Marc Andreessen has shared a similar opinion, saying in an interview on the 20VC podcast: “Essentially, every large company is overstaffed.

“It’s at least overstaffed by 25%. I think most large companies are overstaffed by 50%. I think a lot of them are overstaffed by 75%. Now they all have the silver bullet excuse: Ah, it’s AI.”