Wall Street just priced AI layoffs

The template just dropped. Jack Dorsey cut 4,000 jobs—40% of Block’s entire workforce—and the stock surged 24% overnight. Not despite the layoffs. Because of them. He called it an AI decision, said “intelligence tools have changed what it means to build a company,” and predicted most companies will make similar cuts within a year. We broke down why the 24% stock surge matters more than the layoffs themselves—because Wall Street just handed every CEO a replicable playbook for AI-framed workforce cuts.

The infrastructure making those AI claims credible is scaling fast. Anthropic acquired Vercept on Wednesday—a computer-use agent startup whose product could operate a remote MacBook autonomously. Claude’s OSWorld score has jumped from under 15% to 72.5% in 14 months. And Meta just signed a multibillion-dollar deal to rent Google’s TPUs—on top of its existing $60B AMD pact and its Nvidia Rubin order. Three chip vendors, one company. The AI buildout isn’t theoretical anymore.

But the power question cuts both ways. Today is the deadline Hegseth gave Anthropic to drop its safety guardrails for military use of Claude—and Dario Amodei rejected the Pentagon’s final offer, calling the compromise language “legalese that would allow safeguards to be disregarded at will.” AI powerful enough to justify replacing 40% of a company’s workforce is powerful enough to fight over. That fight is now at the Pentagon’s front door.

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Block AI Layoffs: Dorsey Cut 40% and Wall Street Rewarded It Block’s open-source Goose agent, the AI washing debate, and why Wharton’s Ethan Mollick and even Sam Altman aren’t buying Dorsey’s framing. Read the full analysis →