Hey friends - happy Friday. I’ve got a longer one for you, so let’s jump in.

🌎 The Big Picture

The most important discussion point of the week came from one company.

This week, Jack Dorsey announced Block, the company behind Square, Cash App, and Afterpay, is cutting 40% of its workforce. That's 4,000 people out of 10,000 gone. The stock surged 25% in a single day.

That last part is what you should really pay attention to, and it tells a very different story than the headlines suggest.

Markets were already nervous. Investors have spent the last few weeks waking up to an uncomfortable truth: AI isn't going to make every company more profitable overnight. It might actually disrupt a lot of industries. Citrini Research published a widely-circulated macro note this week imagining a world where superintelligent AI drives unemployment past 10% within TWO YEARS. They called it a hypothetical, not a prediction, but it went viral because it said out loud what a lot of people were quietly thinking and made this expectation much more consensus.

There was good news this week, though. Anthropic came out and said they plan to mostly partner with existing companies and build integrations rather than replace them. That's not a minor footnote. The worst-case fear was that the big model companies would just eat every existing industry whole. That's not what's happening - not yet.

Now to Block. Before you buy into the AI apocalypse narrative, let’s call this more likely what it is: a company cleaning up a hiring mess from the pandemic boom.

Block peaked near 13,000 employees around 2023, up from roughly 3,800 pre-pandemic. They hired aggressively, did modest 8% trims in 2023 and 2024, and are now cutting from 10,200 to under 6,000. That's basically returning to their pre-pandemic size. They added almost 10,000 people during the boom years and now they're cutting back, the same story as the tens of thousands of layoffs you heard from Meta, Google, and Amazon before them.

This is also a company that renamed itself from Square to Block in November 2021, peak crypto, peak NFT, peak Web3, weeks after Facebook became Meta. They are very good at reading investor sentiment and capitalizing on a moment. Right now, the moment is AI. The cut is real, but it's overdue right-sizing dressed in a compelling narrative at the perfect time. That's not a knock on them. It's actually impressive brand management.

Why the doom scenarios don't quite hold up.

The Citrini scenario assumes companies will adopt the most complex autonomous technology ever built faster than they have ever adopted any technology before. Think about your own company. How many are still running on Windows Vista, doing things manually because the systems are just too complex? There are all these weird exceptions that only the one person who has been there 20 years understands, and none of it is in a manual anywhere.

Think about AI like a really smart unpaid intern. The tasks the best interns don’t screw up are things with a clear process and very little experience-based decision-making. There's a decent amount of that work out there, but it's not most of the work. And every company that wants to actually automate will first have to redesign how they operate. That's not a software update. That's a years-long business transformation.

The companies that will move fast are nimble, founder-led startups that already change their processes every day. Block is one of them. Early-stage startup headcount has already been cut nearly in half since 2021 according to Carta. But these are the outliers, not the rule. Most companies are just not built to restructure overnight.

The more realistic picture.

The clearest path forward isn't mass unemployment. It's that hiring just continues to slow. Boomers are aging out of the workforce in huge numbers, immigration is stalling, and the US just doesn’t have enough workers to keep pace with the economy. Last year was the lowest hiring in decades, outside of a recession, but unemployment didn’t increase. AI fills that demographic gap without necessarily displacing the people already in the workforce.

In capitalism, companies rarely say "I can do the same business cheaper, so I'll just pocket the savings." They say "I can do more business at lower cost." Efficiency drives growth, not just cuts. Companies aren’t working 4-day weeks because they can do what they did 10 years ago in less time.

The place to watch is entry-level, not mid-career. A 22-year-old getting into the workforce faces real headwinds because AI handles exactly the process-driven, low-judgment tasks that used to be entry-level work. But the positive side is that a 22-year-old can also be reskilled relatively quickly. The truly catastrophic scenario would be tens of millions of 50-year-olds with 30 years in one job needing to retrain into a completely different industry, but it does not look like the path we're on.

What to actually do with this.

If you're early in your career or advising someone who is:

• Learn AI tools fluently, not just how to use them but how to build and implement workflows around them

• Understand that your real edge is judgment, the experience-based decision making that isn't documented anywhere and that AI genuinely cannot replicate yet

• Pay attention to the positive side of this: AI is putting enormous capability into individual hands, and that means more opportunity for independent businesses and startups than we have seen in a generation. Start a company and build wealth.

If you're investing, the signal this week is that the market is actively rewarding layoff announcements. That creates an incentive structure worth tracking because companies will do what boosts their stock. So we may see more layoff announcements labeled as AI.

Block's 25% single-day pop on 4,000 job cuts is the most important story of the week. Not because it signals the end of work, but because it tells you exactly what the market wants to see next, and how to think about who is positioned to deliver it.

🏭 The Companies Everyone’s Talking About

❔ The Big Question of the Week

Scoops app users: We have taken the beta app offline for a short period for some major updates. Can’t wait to show you all what we’ve been working on! Reach out if you have any questions.

We’re going to switch up the content in this spotlight for a bit to make sure you all have the info you need to master your week.