I read an article the other day that got me thinking about the day, 20 years ago, that I, along with many others, was laid off from MacLaren McCann due to General Motors’ sales declines, and how I suggested a few of the same alternate employment suggestions to MacLaren McCann’s HR department to no avail.
“That’s not how we do things around here.”
True enough . . . just because MacLaren McCann was a large Advertising Agency that prided itself on its ability to come up with “creative communication solutions”, it does not follow that the agency is willing or able to think creatively from an operational standpoint; despite the irony that any ad agency is only as good its people.
Highlights of the article are below.
Last week, Jack Dorsey stunned markets with a bombshell: Block, the fintech company he co-found-ed, will eliminate 4,000 positions, blaming artificial intelligence. The move removes nearly half the workforce and ranks among the most aggressive Al-related reductions to date. As thousands of employees were informed that computers were taking their jobs, financial markets cheered.
Block's shares surged 25%, adding more than US$6 billion in market value. In his note to employees posted on X, Dorsey framed the decision in starkly binary terms: "I had two op-tions: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now," he posted. What is striking is the narrowness of the decision set especially since Dorsey acknowledged that Block is "strong gross profit continues to grow." To be fair, Dorsey didn't sound like a typical CEO cost-cutter. His memo was direct and compassionate, and he offered generous severance packages.
Yet, tone and substance are different things. (While) Dorsey's dilemma is real. The troubling question is why a highly profitable company, led by a CEO who genuinely cares about people, treats layoffs - and only layoffs - as the default response to technological progress?
So, what other options did he have?
One would be to shorten the work week.
Another — in the spirit of Google's "20% time" policy — would allow employees to spend one day a week on self-guided side projects. In Google's case it helped create Gmail, Google News and AdSense.
It would probably generate synergies for Block as well.
A third option would be reallocating labour internally — growing the firm, investing in new products and expanding into new markets.
Lastly, to evade shareholder pressure, Dorsey could have taken the company private, or made it employee-owned, making it more about people and less about profits.
Dorsey's "two options" framing exclude this entire menu. This matters because the corporate narrative increasingly treats layoffs as the natural, almost inevitable, response to Al-driven efficiency.
Amir Barnea is an Associate Professor of Finance at HEC, Montreal
and a freelance contributing columnist.