Block just announced it's cutting 40% of its workforce, citing AI as the reason. But the justification sounded less like "AI can do these jobs now" and more like "AI might eventually do these jobs." That distinction matters a lot.
Three years into the current AI wave, a pattern is emerging that should worry both employers and employees: AI isn't just automating work. It's automating the appearance of work.
The Performative Productivity Problem
Think about how many workplace tasks already existed primarily to look busy: lengthy status reports, reformatted slide decks, meetings that could have been emails. AI makes all of these faster to produce, which means people can generate more of them with less effort. The output looks impressive. The actual value created hasn't changed.
This cuts both directions. Employees can use ChatGPT to produce polished-looking deliverables in minutes that used to take hours, masking whether the underlying thinking is any good. Managers can point to "AI-driven efficiency" to justify headcount reductions that are really just cost cuts dressed up in tech language.
What Block's 40% Cut Actually Signals
Block's reduction is one of the steepest AI-attributed layoffs we've seen. But when a company cuts nearly half its people based on AI's potential rather than its demonstrated capability, that's not an AI story. That's a restructuring story using AI as PR cover.
The companies getting real value from AI right now are mostly using it to augment existing workers, not replace them wholesale. Customer support teams handling 3x the ticket volume with AI-drafted responses. Marketing teams producing content variations without hiring more writers. Development teams using code assistants to ship features faster with the same headcount.
The fake work problem runs deeper than any single layoff announcement. As AI tools get better at producing professional-looking output, organizations need better ways to measure actual outcomes rather than activity volume. A perfectly formatted AI-generated report is still worthless if nobody reads it or acts on its recommendations.
The uncomfortable truth: AI doesn't create fake work. It just makes existing fake work cheaper and faster to produce. Companies that couldn't distinguish between real output and performative output were already in trouble. AI just made the problem impossible to ignore.