A Bold Reduction Amid Strong Results (Image Credits: Images.fastcompany.com)
Block Inc. dramatically reduced its workforce to under 6,000 employees, a move its CEO Jack Dorsey tied directly to the rise of artificial intelligence tools.
A Bold Reduction Amid Strong Results
Nearly half of Block’s staff faced layoffs, dropping headcount from more than 10,000. Dorsey detailed the cuts in a shareholder letter released Thursday alongside fourth-quarter 2025 earnings.
Gross profits doubled between the first and fourth quarters of the year. The company, which operates Square’s payment systems, Cash App, Afterpay, and Tidal, positioned the restructuring as a path to greater efficiency. Dorsey emphasized that a smaller team equipped with advanced tools could achieve more than the previous larger group.
AI Tools Reshape Corporate Strategy
Dorsey described the shift as proactive rather than reactive. He argued that most firms lagged in recognizing AI’s potential to transform operations.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” Dorsey wrote in the shareholder letter. The executive framed Block’s decision as a competitive edge, allowing the firm to adapt on its own timeline. Intelligence tools, he noted, enabled this leaner approach without compromising output.
Investors Rally, But Stock Trails Peaks
Shares surged over 20% in premarket trading Friday following the announcement. The positive response came despite a year-to-date decline of more than 16% as of Thursday’s close.
Block’s stock remained well below its pandemic-era highs. Dorsey shared a separate note to employees on X, detailing support for those affected. U.S. workers received 20 weeks of pay plus one additional week per year of service, six months of healthcare coverage, vested equity through May’s end, personal devices, and a $5,000 transition payment. International staff qualified for packages aligned with local laws.
Criticism Mounts Over Style and Substance
Reactions poured in swiftly, with many focusing on Dorsey’s lowercase-only X post announcing the changes. Critics likened the style to casual social media rather than a major corporate disclosure.
Tech observers drew parallels to other industry leaders. One reporter noted Dorsey’s pattern of emulating figures like Elon Musk in operational decisions. Employees retained access to company systems until Thursday evening Pacific time, with a follow-up message promised Friday. Dorsey stressed the cuts stemmed from opportunity, not distress.
Key Takeaways
- Workforce cut from 10,000+ to under 6,000, credited to AI efficiency.
- Shares jumped 20% premarket; profits doubled in 2025.
- Severance includes 20+ weeks pay, healthcare, and $5,000 cash for U.S. staff.
Block’s aggressive pivot underscores a growing tension between technological promise and human cost in tech. As more firms eye similar moves, the balance between innovation and employment hangs in question. What do you think about Dorsey’s prediction? Tell us in the comments.