By Manya Saini
(Reuters) – Payments firm Block has begun to cut jobs this week as part of its previously disclosed plans to trim headcount and reduce costs, a person familiar with the matter told Reuters on Tuesday.
The layoffs are in line with a broader cut back and focus on costs across the technology industry amid high interest rates and a shaky economy. Unity Software, Paramount Global and eBay are among the companies that have announced layoffs in 2024.
Meanwhile, the outlook for payments firms has been marred by worries that a slowing economy and high interest rates will continue to pressure consumer wallets, particularly those in the lower-income bracket.
In November, Block had said it expects to reduce the size of its overall workforce by the end of next year, while adding it was also embarking on a broader cost-savings program.
At the end of the third quarter, Block employed just over 13,000 people and has committed to reducing it to 12,000 by the end of 2024.
“We have identified a number of areas where we expect to find savings such as real estate, process improvements using automation and discretionary spend,” Chief Financial Officer Amrita Ahuja had said in a call with analysts at the time.
Earlier on Tuesday, two brokerages – Wedbush and BTIG – upgraded their ratings on the stock. Block shares were down marginally in afternoon trading.
“We think Block’s increased focus on costs and bottom-line aligns well with shareholders and opens the company up to a larger investor base,” analysts at BTIG wrote in a note.
Block’s stock had jumped roughly 23% in 2023.
The start of job cuts at Block was first reported by CoinDesk earlier in the day.
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
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