Tech Firm's Move Fans New Dread Of AI Jobs Wipeout

“It was the doomsday scenario many white-collar workers had feared: an S&P 500 company cutting nearly half of its staff. The reason? AI.

 

The blowback was quick and severe.

 

After Block CEO Jack Dorsey announced that his financial-technology firm -- which includes Square and Cash App -- was laying off 4,000 people, text threads between workers outside Block erupted, while executives began furiously dissecting the move. And then, they went public.

 

"Square is just the beginning," former Meta and Salesforce executive Clara Shih warned on X.

 

"A lot of the jobs that we've thrown human beings at the last 20 or 30 years, you won't need as many human beings doing those same jobs," Amazon CEO Andy Jassy said in a Friday in a television interview, while noting new roles will be created. "Everyone will point the finger at everyone else," investor Brian Norgard predicted.

 

Some saw Block's move as evidence of the company's mismanagement and overhiring. Plenty raised concerns that other executives might now follow suit and more aggressively lay off their own employees.

 

Even if some considered AI a convenient excuse for the layoffs, the downsizing sparked outrage among technology workers. Many viewed the move as the clearest sign yet that companies would be far smaller in the future -- and that employees would bear the pain.

 

"When things crystallize like this, it brings out the pitchforks and the torches," said Marc Cenedella, CEO of the jobs platform Ladders. "People are angry at the destabilizing impact that AI is inevitably going to have on our economy and our work life."

 

Backlash to AI has been simmering for months. In a YouGov survey released in December, 77% of respondents said they worried AI could pose a threat to humanity. A separate survey from the Pew Research Center showed many people were more concerned than excited about AI.

 

Fearing higher utility costs or job losses, communities around the country have sought to block or delay new data-center projects, part of growing resistance to such projects.

 

Until recently, AI messaging from the business and tech elite in public has been largely focused on the benefits to economic growth, innovation and, naturally, bottom lines. Yes, there may be a bumpy transition and many roles will change, but businesses and the broader economy will emerge more prosperous, creating a raft of new jobs, the narrative goes.

 

Now, as angst over the AI boom shows up in stock-market jitters and viral online posts, more executives are saying that a key part of harnessing AI's promise will be to confront the economic and societal upheaval that could come with it.

 

"AI will create more productivity, but it could create other derivative effects," JPMorgan Chase CEO Jamie Dimon told investors Monday. "Laying those people off will cause a problem, even if it creates more productivity in society. That's why society's got to think this through a little bit. It may happen faster than we can adjust to it."

 

The vibe shift around AI has been undeniable of late.

 

Fears of its more destructive potential have rippled through markets in recent weeks, sending the stocks of software makers, insurers and even food-delivery apps like DoorDash lower. A viral thought experiment by Citrini Research foretelling mass white-collar unemployment, cratering consumer spending and financial contagion tapped into deep anxieties about the technology both on Wall Street and among the broader public.

 

Some AI leaders, including Nvidia CEO Jensen Huang, have rebutted the doom-and-gloom scenarios. Huang told a conference in February that the idea that AI will replace software is "the most illogical thing in the world."

 

To white-collar workers, it doesn't feel that illogical, especially as more companies initiate layoffs.

 

Thomas Kerr, an accountant in Cleveland, said he has told friends and professional acquaintances that they should prepare for white-collar jobs to go away, and to find a sense of meaning in potentially new occupations.

 

"It's the industrial revolution -- people going from farmland into factories -- but we don't know what the factories are yet," Kerr said of the AI era. As people lose their jobs, "we're going to have to help people holistically find purpose and to let them know it's OK, and it's not your fault, and it's not your boss's fault."

 

On earnings calls, more companies are mentioning AI when referencing layoffs, according to AlphaSense, a financial-research platform.

 

Companies are also more explicitly including the backlash to AI as a potential threat to their companies. The number of S&P 500 companies that included AI as a material risk in securities filings jumped to 72% last year from 12% in 2023, according to an analysis by the Conference Board and ESGAUGE. The game maker Roblox puts it like this in its annual report: "Failure to address AI ethics issues by us or others in our industry could undermine public confidence in our use of AI."

 

The disclosures reflect a reality, analysts say, that much remains unclear about AI. "Companies have realized this is so transformative, and there's still so many unknowns, that they do have to make sure to disclose these risks because they could have large implications," said Sarah Hoffman, director of AI thought leadership at AlphaSense.

 

Block expanded rapidly during the pandemic, as it built out its Cash App business. The payments firm ended 2019 with 3,835 workers and employed 12,985 people by the end of 2023. Dorsey wrote on X that the company had overhired during the pandemic, and told analysts that he also believed other companies would undertake similar restructurings.

 

"Within the next year, I believe the majority of the companies will reach the same conclusion and make similar structural changes," Dorsey told analysts. "I don't think we're early to this realization. I think most companies are late."

 

Many longtime technology executives agree.

 

"Smaller teams do better than larger teams, always," Mo Koyfman, founder and general partner at the venture-capital firm Shine Capital, said in an interview. "Every additional body that you throw at a problem adds more process, more bureaucracy, more politics, more inefficiency, more coordination."

 

The rapid pace of change with AI has also led to a shift in how executives talk about the technology. Many are beginning to be far more candid.

 

Since taking the top job at the telecom giant Verizon last fall, CEO Dan Schulman has predicted that artificial intelligence could trigger 20% to 30% unemployment over the next two to five years. He warns that humanoid robots might encroach on the manual-labor jobs some see as AI-proof. And he has called for more reskilling efforts to help tame the coming tech storm.

 

"We are at a precipice right now that if you say to your employees there's not gonna be any job disruption, I think you lose all credibility -- because all of them get it that there's going to be," Schulman said in a panel at the World Economic Forum in Davos, Switzerland, earlier this year.

 

Verizon said in November it planned to cut more than 13,000 jobs, its largest reduction ever. As part of the move, the company also created a $20 million reskilling and career-transition fund for affected workers. Verizon has said its layoffs weren't related to AI.

 

Despite his warnings, Schulman is also an AI believer. The technology is likely to lead to breakthroughs in health, material science, longevity and other realms, he has said. "Ideas are going to blossom, and maybe there'll be a bunch of new jobs that happen as a result," he said in January.

 

For bosses to maintain trust, they must be transparent with workers about what is happening, said Arianna Huffington, CEO of the behavior-change company Thrive Global, who has served on the boards of Uber Technologies and other companies.

 

With AI, "it's not like we know exactly the impact it's going to have on jobs," Huffington said in an interview. "But, of course, it's going to have an impact on jobs."” [1]

 

1. Tech Firm's Move Fans New Dread Of AI Jobs Wipeout. Cutter, Chip.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 Mar 2026: B1.