AI has become the most market-friendly explanation a CEO can give for cutting headcount. Whether it’s true or not, the market buys it.
Yesterday Jack Dorsey cut 4,100 people from Block, nearly half its entire workforce, and the stock surged 24%.
His explanation was that “intelligence tools have changed what it means to build and run a company.” His prediction is that most companies will follow within a year.
The market appears to have loved it, but there are also sceptics who have a point.
Effective AI tools are still very new. A sudden firm-wide efficiency gain of 50% is hard to square with what the tools can actually do today. A CEO with vision would arguably be using AI for expansion, not decimation. And some say Dorsey has form here, that he over-hired at Twitter too.
Both things can be true at once. AI is genuinely reshaping how small teams operate. And “we are restructuring for AI” is becoming the safest sentence in the boardroom. The stock reaction tells you less about whether AI actually drove the decision and more about what story investors want to hear right now.
The bigger pattern we’re watching is AI crossing from a technology story into safe corporate narrative. And once a narrative moves markets, it starts to move decisions, whether the underlying capability justifies it yet or not.
♻️ Repost if you think we’re seeing corporate narrative outpace AI reality in the boardroom. 🔔 Follow Felix Ghauri for AI and what changes next. 🗂️ Sources in first comment.
