Moody's economist Mark Zandi on thousands of layoffs at Jack Dorsey's Block; If companies cut workers as Block did, outright job losses appear to be ...

Moody’s Analytics chief economist Mark Zandi has now raised alarms over the growing impact of artificial intelligence on the labour market after Jack Dorsey’s Block announced 4,000 job cuts.

However, Block did not directly blame AI, Zandi said the company’s messaging strongly automation was a driving factor. “While Block didn’t explicitly pin the cuts on AI, it all but did,” he wrote on X, adding that smaller teams are increasingly able to accomplish more as AI tools reshape workflows.

Zandi believes AI adoption linked to weaker hiring

Zandi also noted that increasing rate of AI adoption is linked to weaker hiring, and if more companies follow Block’s lead, outright job losses appear increasingly likely.

Zandi further wanted that the increase of Block’s shares after the layoffs could also encourage other companies to cut staff, seeing financial markets reward such moves.“Of course, AI could be a smokescreen for other, less flattering reasons for the cuts, but I suspect not. And even so, it may not matter for the job market, as the jump in Block’s stock price signals to other companies that they will be rewarded if they follow suit.

Judging from this scatterplot, AI is already weighing on the job market, but we know this is due to weaker hiring, not layoffs. But if businesses believe there is no going back on #AI, and cut workers as Block did, outright job losses appear increasingly likely,” added Zandi.

The labour market under pressure

The comments made by Zandi came just before the latest U.S. jobs report, which showed the economy lost 92,000 nonfarm jobs in February, defying expectations of a 50,000 gain.

December figures were also revised downward, underscoring a weakening trend. Zandi had previously cautioned that January’s strong job gains were largely concentrated in healthcare and unlikely to be repeated.Other firms are reportedly preparing similar moves. Oracle Corp. is planning thousands of job cuts tied to AI data center expansion, while Goldman Sachs has warned that unemployment could rise in 2026 due to AI-driven displacement.Zandi’s remarks highlight a turning point: AI is no longer just a productivity tool but a force reshaping employment itself.