In a shocking turn of events, the parent company of the 'buy-now-pay-later' giant Afterpay has dismissed approximately half of its Australian staff. This drastic move came merely two days after employees returned from an extravagant company retreat in Lorne, Victoria, where one worker had recently praised the firm's culture as being 'better than ever'.
Sudden Announcement via Social Media
Around 200 staff members learned of their termination on Friday through a 628-word statement posted on X by Block CEO Jack Dorsey. Dorsey, the co-founder of Twitter and a prominent billionaire in the tech industry, explained that the decision to reduce his global workforce of 10,000 by 40% was driven by the integration of artificial intelligence.
He stated, 'Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed.' Dorsey added, 'We're already seeing that the intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working.'
Extent of the Layoffs
According to reports from the Australian Financial Review, almost half of the Australian workforce has been culled. This includes entire teams within communications, legal, design, marketing, product, and engineering departments. Notably, the marketing team had already faced a 60% mass redundancy earlier in 2024. The only Australian department spared from direct impact is the sales team.
Block, which acquired Afterpay for over $39 billion in 2022, has not officially confirmed the exact number of affected employees. However, the severance packages for Australian workers are reportedly generous, including 20 weeks' pay plus an additional week per year served, all equity vested until the end of May, and six months of healthcare. Additionally, they will receive around $7,030 in cash and be allowed to keep their company laptops.
Contrast with Recent Extravagance
The redundancy round is particularly jarring given that just two months prior, Block spent nearly $96 million flying 1,300 Afterpay Australia staff, along with its global workforce, to California for a lavish retreat at the Oakland Arena & Coliseum. The three-day event featured performances by DJs and rappers such as T-Pain and Anderson Paak, free-flowing alcohol, and a fireside chat with rapper Jay-Z, who is also a director at Block.
Employees who remain with the company have been promised a 5.68% pay increase and approximately $30,000 in cash and shares. This comes as Block recently reported a 17% increase in profit before tax, surpassing $14 billion.
Employee Reactions and Broader Trends
An Afterpay employee who was let go in this latest round described the situation as 'feels scary right now', yet expressed continued support for Dorsey's vision. In a post seen by the Daily Mail, the employee said, 'If you’re finishing this journey with Block/Afterpay soon, it’s the unknown for a bit. But a year from now you’ll be somewhere new, and grateful that life handed you a new set of cards.' They added, 'If you’re staying, enjoy the ride. It’s an awesome company with so much to offer the world. I wholeheartedly believe in Jack’s vision for creating more economic empowerment for people who might otherwise get left behind.'
This move aligns with a broader trend of Australian workforce reductions ahead of anticipated AI productivity gains. For instance, WiseTech CEO Zubin Appoo announced an 'AI transformation program' that will result in about 2,000 job losses this year, with reductions of up to 50% in product, development, and customer service. Similarly, Commonwealth Bank confirmed plans to lay off 300 Australians, despite recently recording a $5 billion profit.
