The Headline vs. the Reality
In early 2026, Block announced it was cutting approximately 40% of its workforce. Dorsey's framing was deliberate: AI-powered tools and flatter team structures meant the company could do more with far fewer people. The stock surged. Financial media celebrated it as bold and forward-thinking. And suddenly every SMB owner with a newsletter subscription started asking: "Is this where we're headed?"
Let me offer a different read.
What the Block Story Actually Tells Us
Block is a publicly traded technology company with growth-stage investors, quarterly earnings scrutiny, and a stock that responds to signals of operational leverage. When Dorsey talks about AI enabling a leaner organisation, he is also speaking a language Wall Street finds attractive. The business logic and the investor relations logic are intertwined in ways that don't apply to most organisations.
Block is not alone. Klarna made similar moves. A 2025 World Economic Forum survey found that 41% of employers expected to reduce headcount in some roles due to AI over the next five years. But these are large, software-driven enterprises with highly repetitive, systematised workflows that are genuinely automatable at scale. They have the runway to absorb the organisational disruption.
If your business runs on relationships, local expertise, professional judgment, and trust — and the majority of SMBs do — then the Block playbook is not just wrong for you. It is actively dangerous.
The Training Multiplier They're Not Talking About
Here is the data point that deserves as much attention as the Dorsey announcement and got about a tenth of it. KPMG research found that organisations investing in AI training saw productivity gains four times greater than those that deployed tools without meaningful enablement. Four times. Not a marginal difference. A fundamental performance divergence driven entirely by whether the people using the tools understood how to use them well.
That reframes the entire conversation. The highest-return AI investment is not a reduction in headcount. It is a serious, sustained investment in making your existing team capable of doing things they couldn't do before. Organisations that cut staff to fund AI deployments and skip enablement are getting a fraction of what's available, at the cost of institutional knowledge, client relationships, and team trust that took years to build.
The Builder-to-Coach Shift
There is a genuinely important leadership transition that AI makes necessary — but it's not the one the mass-layoff narrative describes. The real shift is from builder to coach.
When AI handles the first draft, the initial research, the routine analysis, and the repetitive communication, the premium on individual contributor output changes. What your team needs from leadership is not someone who can do the work faster. They need someone who can design the workflow, set the quality standard, identify where AI is adding noise rather than signal, and develop the team's capacity to use the tools with judgment.
That is a coaching function, not a building function. And it is the much more sustainable version of what AI transformation requires from leadership.
Redesigning Without Destroying Trust
Start with transparency about intent. If your AI strategy is genuinely about expanding what your team can do — not shrinking who does it — say that explicitly and repeatedly, then demonstrate it. When AI frees up capacity, point visibly to where that capacity went.
Second, involve your team in the workflow redesign. Deloitte's 2025 human capital research found that organisations with high employee involvement in AI implementation were 2.3 times more likely to report successful adoption outcomes. That's the difference between a tool that gets used and a tool that collects digital dust.
The right AI strategy for most organisations is not leaner. It is more capable. A team of twenty that can do the work of forty — while maintaining relationship quality and professional judgment — is a genuinely formidable competitive position. That's not the Block story. It's a better story.