When Jack Dorsey announced in late February that Block would be cutting 24% of its workforce, the stated rationale was automation: AI was now capable of doing a significant share of what those people had been hired to do. This week, Citi raised its price target on Block's stock from $85 to $100, a 43% upside call, citing the company's AI tools as the key driver of its growth trajectory. The market has given its verdict. Whether the people who lost their jobs share that view is a different question.
Block's AI story has three main characters. Goose is an open-source AI agent framework that connects large language models to software engineering workflows. Builderbot is an internal agentic tool that writes, reviews, and deploys code. Moneybot and Managerbot are consumer-facing products that help individuals and small businesses manage spending and operations. Together, Citi's analyst says, they should "drive even further end user engagement helping to sustain mid-to-high teens gross product growth and rapidly expanding margins." Block shares have rallied 33% over the past three months.
Coinbase has followed a similar path. In early May, the cryptocurrency exchange announced it was cutting approximately 14% of its workforce, about 700 jobs. The company cited both a prolonged crypto market downturn and structural changes driven by AI adoption, with engineering teams now operating with smaller headcounts as internal workflows became increasingly automated. Leadership framed the cuts as part of a broader efficiency drive and a shift toward smaller, more autonomous teams with fewer management layers.
The pattern repeats across the crypto and fintech sector more broadly. Kraken has made cuts in recent periods. Payment companies and fintech platforms have reduced roles as AI takes over compliance monitoring, transaction screening, and customer support functions. Yahoo Finance reporting on the sector notes that automation trends are influencing layoffs at least as much as market conditions, if not more so. The logic is consistent across companies: AI can do the work, so the work no longer requires people.
The investor case for this is straightforward. Fewer employees means lower costs. Automated systems do not require salaries, benefits, or management overhead. If the quality of output is comparable, the efficiency gain flows directly to margins. For companies in sectors where margins have been thin and competition intense, the math is compelling. Citi's note on Block makes the relationship explicit: AI tools are not just a product feature but a structural shift in how the company produces value with a given amount of capital.
What is harder to see in any individual earnings report or analyst note is the aggregate effect. When Coinbase cuts 700 jobs and Block cuts a quarter of its workforce and Kraken trims and fintech platforms restructure, the cumulative impact on the people who held those roles is substantial. Compliance monitoring, transaction screening, customer support, software engineering review: these are not marginal job categories. They represent real careers at real companies. The AI models replacing them are, in most cases, trained on data those same workers helped generate.
The fintech sector's AI pivot is also happening in a specific market context. Crypto trading volumes have remained subdued since the peaks of earlier years. Venture funding has tightened. Interest rates stayed high for longer than many in the sector anticipated. Companies that scaled aggressively during the boom are now adjusting to a more constrained environment. AI-driven restructuring is, in this sense, partly a response to economic conditions that predated the AI availability: the technology is a tool that makes cost reduction faster and more thorough than it would otherwise be.
The honest version of the Citi report and the Coinbase announcement is not that AI is creating efficiency; it is that AI is allowing companies to extract more value from capital while employing fewer people, and that financial markets are currently rewarding this outcome. That is not a scandal. It may be a rational response to incentives. But it is worth being clear-eyed about what is being optimized for, and who pays the cost of the optimization.