Washington: Jack Dorsey’s Block is cutting 4,000 employees, reducing its workforce by nearly half, in a move the financial technology firm is describing as a bet on artificial intelligence changing the future of labor productivity.
Block has been restructuring its business model and staffing since 2024 as the company’s stock has lagged. At the same time, the company has invested heavily in AI tools to run more efficiently, including building its own tool called Goose.
The reduction in force, which was announced in a shareholder letter on Thursday, comes after rolling job eliminations that have often been tied to annual performance reviews.
Dorsey, the company’s co-founder, said in a call with analysts that he believes many companies will ultimately have to make similar moves due to AI.
“I don’t think we’re early to this realization,” he said. “I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively.”
After the announcement, Block’s stock jumped as much as 27% in extended trading.
Block’s cuts are the latest case of workforce reductions across fintech and the broader technology sector, in which companies have pointed to AI as a catalyst, with companies from Amazon Inc. to Salesforce Inc. citing the technology as justification for shrinking headcounts.
Block offered little granular detail on exactly how its AI tools are making specific roles unnecessary, and some analysts have questioned whether companies are genuinely being transformed by AI or simply using it as a convenient rationale for cost cuts they would have made anyway.
Still, the anxiety around AI’s disruptive potential intensified this week after a speculative report from Citrini Research went viral, modeling a scenario in which AI agents autonomously reroute payments away from card networks and onto cheaper stablecoin rails, threatening the economics that underpin incumbents. The report triggered a selloff that erased billions in market value this week, dragging down shares of payment companies, software firms and delivery platforms before a tentative rebound.
For Block, which straddles both payments and fintech, the Citrini scenario lands close to home. Dorsey’s bet is that building AI tools internally — rather than being disrupted by them — can sustain a leaner company. Whether that gamble pays off or simply accelerates the displacement the market fears is a question that investors are only beginning to price in.
Even before the challenges created by AI, Block was struggling with questions about its competitive position. The company’s stock has dropped around 40% since the beginning of 2025.
The company had already undergone multiple rounds of layoffs in recent years in an effort to streamline operations. Its workforce nearly tripled from 2019 to 2023, according to human capital data platform Live Data Technologies. Like Shopify and Coinbase, Block hired aggressively during the pandemic, but it continued hiring for a year longer than its rivals, the data show.
As of January, Shopify’s cuts were a steeper 24% from its 2022 peak headcount, while Block had reduced staffing by more than 14% from 2023, according to Live Data.
Yet this week, Block said it was working from a position of strength.
In the shareholder letter, the company highlighted strong financial performance over 2025, including gross profit growth that more than doubled from the first quarter to the fourth quarter.
Dorsey touted how the company has reignited growth of users of its peer-to-peer payments app Cash App, scaled its lending products and accelerated Square gross payment volume. Block reported gross profit of $10.36 billion in 2025, up 17% year-over-year.
“We are taking bold and decisive action here, but we’re doing it from a position of strength,” Amrita Ahuja, chief financial officer, said in an interview with Bloomberg. “We’re doing it in a way that we believe positions us to move even faster for our customers.”
In a note that Dorsey sent to employees, and shared on X, he said that the employees who were asked to leave would be given severance pay, six months of health care and $5,000 to help with the transition.
On the call with analysts, Dorsey said he decided to make the change after seeing surprisingly fast progress in the latest AI models.
“Something happened in December of last year, just last year, where the models just got an order of magnitude more capable and more intelligent, and it’s really shown a path forward in terms of us being able to apply it to nearly every single thing that we do,” he said. “So if there are any gaps in our usage of AI right now, it’s an application gap.”
This report is auto-generated from Bloomberg news service. ThePrint holds no responsibility for its content.
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