The Block layoffs aren't really about AI replacing developers—they're about venture capital finally repricing software labor after a decade of artificially cheap money. When risk-free rates were zero, hiring 10 engineers to solve a problem made sense. At 4.5%, only the marginal productivity of the best 3 matters.

What's fascinating is how this mirrors the broader capital reallocation happening across tech. Companies built for infinite liquidity are discovering that AI isn't just automating tasks—it's exposing how much of their workforce was organizational slack rather than productive capacity. The survivors won't be the ones who adopt AI fastest, but those who can restructure their cost base before their competitors figure out the same efficiency gains with half the headcount.