What if Jack Dorsey's right about AI and jobs?

• Key insight: Block's Jack Dorsey thinks companies in the next year will realize they need substantially fewer employees because of AI-led automation.
• Supporting Data: The U.S. economy runs on consumer spending, which comprises about 70% of GDP.
• Expert Quote: "Society has got to think this through a little bit. We should be prepared." — JPMorganChase CEO Jamie Dimon

Two Sundays ago, a firm called Citrini Research got a lot of people worked up over a piece it published, written as a look back at the effects of AI on the economy from two years in the future. The gist of it was that in just a few short years, AI-based software had replaced everything, from SaaS companies to travel agents, insurance renewals, financial advisory, tax prep, legal work, real estate, virtually everything that involved some level of human intermediation. The bots were able to get rid of all of it. "We had overestimated the value of 'human relationships,'" the warning from the future said. "Turns out that a lot of what people called relationships was simply friction with a friendly face." That led to massive layoffs, which led to a consumer-driven recession, which depressed asset valuations and cratered the over-levered financial markets, which led to a crisis. A global intelligence crisis. It reads like the backstory to Parable of the Sower.

The piece drove a minor panic on Wall Street - especially after Big Short trader Michael Burry cited it – but it also got a lot of pushback. Critics complained Citrini didn't understand economics, or AI, or both. But this past Friday, Block's Jack Dorsey said he was firing almost half of the company's staff, for the sole stated reason that AI-based programs have gotten so good they are fundamentally rewiring how a company can be run. Suddenly Citrini's fiction didn't seem very fictitious.

Whether or not Dorsey's mass layoffs represent the start of a wave or not is something that's being debated, as our Joey Pizzolato reports. Did Block overhire? Was AI just an excuse? Everybody's entitled to their opinion, but what really stood out to me was Dorsey's pure pragmatism in announcing the move. "Something has changed," he wrote in a letter to shareholders. "We're already seeing that the intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. And that's accelerating rapidly." In Dorsey's view, he simply has no alternative. It is in Block's best interest to run the company as efficiently as possible, and the latest AI programs make it possible to do that with 40% fewer humans around. And Dorsey strongly suggested that every other company would be coming to this conclusion soon enough as well. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes."

Is that the future? Look, if I knew what was going to happen in two years I'd be running a hedge fund, or making a killing on Polymarket. But Dorsey's move feels like a watershed moment. Companies have been racing to embed AI in their operations for a few years now, and some have laid off workers, but there's usually been this promise that AI isn't destroying jobs, it's just changing them. Dorsey's blunt comments totally upend that, and as much as it pains me to say this, I don't think he's wrong. What percentage of every company's operations can be automated? It's not zero.

Banking, for instance, is still a very manually intensive process. I don't have to tell any of you that; you know better than I. Recording, reconciling, custodying, transferring, lending, borrowing, on and on and on. Entire departments are dedicated to different parts of the process. Yes, you all use Excel instead of big ledger books, and the green lampshade lights are relegated to the antique stores. Still, how much of the back-office operations could be completely automated? 30%? 50%? 80%? It won't happen overnight. The hardware and software inside banks, the networks and systems, are sometimes decades old; rewiring them can't be done as quickly as it could be at Block. But regardless of logistics, the number is not zero. 

This past Thursday, Danske Bank said it cut 420 support-staff jobs, citing automation. On Friday, Mizuho Financial, the big Japanese bank, said it would replace 5,000 of its 15,000 administrative staffers with artificial intelligence. The bank did say it would find other jobs for those staffers, but Japanese firms have a different cultural attachment to their workers. I didn't hear Dorsey say anything about finding new work for the 4,000 Blockers being replaced by AI.

Not every company can automate 40% of its business, at least not until humanoid robots get a lot better. But how much of everything every company does, in aggregate, can we automate? Is it 20%? 30%? In Citrini's doomsday scenario, they had unemployment at 10%. In the Great Depression, the worst economic calamity in…well, maybe in history, the unemployment rate is estimated to have been around 25% (the state didn't keep records back then.). It doesn't take a lot of foresight to see we could revisit those levels. How quickly could the economy find new jobs for all those workers? Not fast enough, I'd wager.

For all you bankers out there, it's not just a question of your own staff. What will this do to your customers? How will that affect your bottom line? And keep in mind that the U.S. economy relies heavily upon consumer spending, which comprises about 70% of GDP. We need people working in order to spend.

The ramifications of Dorsey's rewiring are hard to predict, of course, but the crux of the problem, it seems to me, is this: every company doing what is in its best interest in terms of replacing people with AI bots could have the perverse effect of putting millions out of work and wracking the economy, for the first time in more than two centuries flipping Adam Smith's central thesis on its head. Our entire economy is based around Smith's idea that free people working for their own best interests collectively build a strong society. The proverbial invisible hand. And it's more or less been true, depending upon your zip code. What happens if the invisible hand becomes an invisible hammer? That is the question I don't see anybody addressing. Certainly not anybody in a position to do anything about it. The Democrats' economic ideas are all from the 1930s. The Republicans' are all from the 1890s. Nobody seems at all prepared for the reality of 2026. Except Jack Dorsey.

Look, I'm not trying to terrify you. People will adapt. We always do. Whether or not that adaptation is smooth or chaotic depends upon how soon we start figuring out how to adjust to this new reality. "Society has got to think this through a little bit," Jamie Dimon said last week at an investor forum. "We should be prepared." Banking sits right in the middle of everything people do; you folks reading this can be key to this whole transition. If you've got any ideas, send them to your representatives in Washington.