Jack Dorsey fired over 4,000 people on Thursday — basically half of Block’s workforce — during a profitable year, then told the rest of the tech industry to do the same. The stock jumped 23%. That sequence tells you what actually happened and why.

Block posted $1.3 billion in profit. Gross profit grew 24% year over year. Cash App surged 33%. Dorsey himself called it a “strong year.” Then he immediately gutted the company and framed failure as visionary leadership, writing in his shareholder letter that “tools have changed what it means to build and run a company.”

Tools. They haven’t changed what it means. They’ve changed how to destroy value.

Numbers Behind Narrative

Block had 3,835 employees at the end of 2019. Dorsey’s vision was to triple that to over 12,500 by the end of 2022, intentionally building redundant parallel structures for Square and Cash App. The stock peaked at $281 in August 2021. It closed Thursday at $54, crashing down over 80% from the high. Now the after-hours bump on layoff news pushed it toward $67.

So the actual story isn’t CEO use of “tools changed everything in December.” The actual story is that Dorsey overhired massively during COVID, mismanaged the organizational structure by his own admission, watched the stock collapse for four years, and is now using tools as the explanation for a correction that has nothing to do with technical capability and everything to do with executive failure.

Executive failure. I’ll say it again.

He admitted on X that he “incorrectly built 2 separate company structures rather than 1”, yet somehow that isn’t the headline. Wharton’s Ethan Mollick pointed out that given how new effective AI tools actually are:

It is hard to imagine a firm-wide sudden 50%+ efficiency gain that justifies massive organizational cuts.

Allow me to explain. It’s hard to imagine because it didn’t happen.

What happened is a CEO found a narrative that Wall Street would reward him while he screwed the people he was responsible for.

Assembly Line Test

Here’s how you know this isn’t innovation: look at actual innovation and headcount.

Henry Ford didn’t copy the European moving assembly line and then fire half his workers. He hired massively, doubled wages to $5 a day, and scaled production from thousands of cars to millions. The resistance came from craft workers worried about displacement. The actual outcome was more jobs at higher pay producing dramatically more output. That’s what real tool adoption looks like, leading to expansion of capacity, not extraction of labor.

The steam engine didn’t shrink navies. It expanded operational range, mission tempo, and fleet size. You retrain the crew. You don’t throw them overboard.

When a CEO fires half the company during a record profit year and the stock jumps 23%, that’s not an efficiency gain. That’s cynical destruction of the crew that made delivery possible.

Pirates Had Articles

The distinction matters if you know history. Actual pirates, like the ones flying black flags in the Caribbean, operated under articles of agreement. They elected their captains. They voted on major decisions. They split loot according to pre-agreed shares. They even had disability provisions: lose a right arm in battle, receive 600 pieces of eight. Lose an eye, 100. These compensation structures predated any national welfare system by centuries.

You couldn’t be a Dorsey and throw crew overboard on a pirate ship because the crew had collective power over the operation. The captain served at the pleasure of the people doing the actual work.

English buccaneers of the Crown were the Dorsey model. King-licensed exploitation and extraction. Rape and pillage. The letter of marque made everything legal so long as the loot flowed upward. Crews were expendable because the authority structure came from the above crown and trading companies, not from the workers themselves.

The East India Company didn’t share profits with sailors. It consumed them and spat out bones. Crews died of scurvy and abuse at rates that would count as attrition strategy, not negligence. When a voyage was done, survivors got dumped in port towns with nothing.

Dorsey’s Marque

Dorsey’s shareholder letter is a letter of marque. The crown is Wall Street. The 23% stock jump is the loot delivery. And the 4,000 people aren’t crew with articles and shared stakes because they’re disposable labor in a colonial extraction model where the entire point is to minimize the number of people who get a cut.

The “AI monster” framing is the modern version of “the sea monster took them.”

It externalizes the decision to an impersonal force so leadership never has to own the choice. But Dorsey made the choice. During a profitable year. After years of mismanagement he’s now acknowledged. And the market rewarded him for it, which is exactly how the crown rewarded buccaneers. The system was less about building anything to last, more about doing more immediately with less overhead.

His warning that “most companies are late” to the same “realization” reads less like strategic insight and more like herd mentality for CEOs to do what they already wanted to do. It’s CYA dressed as vision. The same pattern you’d expect from someone who already ran this play at Twitter, where mass layoffs were the default move regardless of rationale.

The $2 Million Target

Dorsey’s stated goal is $2 million in gross profit per employee — four times the pre-COVID level of roughly $500,000 per head. That number sounds like an efficiency metric. It’s actually a concentration metric. It measures how few people get to share in the value the company produces. A company generating $12.2 billion in gross profit with 6,000 workers isn’t more innovative than one doing it with 10,000.

It’s more extractive. Colonial plantations by the British ran this principle.

Ford’s assembly line made cars cheaper and workers richer. Dorsey’s “intelligence-native company” makes shareholders richer and workers gone. One is industrialization. The other is ruthless extractive enclosure by fencing off the commons and charging rent for standing on it.

Block will spend $450 to $500 million on restructuring charges, mostly severance. That’s the cost of dumping 4,000 people overboard. The 23% stock jump added roughly $4 billion in market cap in a single evening. The math of extraction always works for the people holding the letter of marque, and only them

Competent captains made crews successful and expanded capability. The ones who dumped people overboard were either panicking or looking for an excuse to run a skeleton crew at maximum extraction. Dorsey’s stock price tells you which one the market thinks he is. History will tell you which one he actually was.