Jack Dorsey's Block Cuts Nearly Half Its Staff for AI-First Future
"Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. A significantly smaller team using the tools can do more and do it better"
Block announced on Thursday that it will cut over 4,000 jobs, nearly half its workforce, as part of an overhaul to embed artificial intelligence across its operations.
CEO Jack Dorsey framed the cuts as a proactive response to AI's transformative impact rather than a financial emergency. "Intelligence tools have changed what it means to build and run a company," he said. "We're already seeing it internally. A significantly smaller team using the tools can do more and do it better."
Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. "Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead," he wrote in a post on X.
He predicted that within a year, most companies will arrive at the same conclusion. "I don't think we're early to this realization. I think most companies are late," he added. "I'd rather get there honestly and on our own terms than be forced into it reactively." Investors responded enthusiastically, sending Block's stock up more than 25% in after-hours trading.
Analysts at Evercore ISI wrote in a note that the layoffs represent "a seminal moment" in the AI era, offering a glimpse into how the technology may fundamentally reshape the corporate world.
Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale at which the technology is starting to translate into lower expenses and higher margins in some industries.
Block said it expects to incur roughly $450 million to $500 million in restructuring charges. Analysts at Truist said the stock was likely surging on hopes of better-than-expected 2026 margins as a result of the workforce reduction.
While many companies have culled smaller proportions of workers through repeated rounds of layoffs, Dorsey's massive single cut stands alone. Block had already undergone multiple rounds of layoffs in recent years in an effort to streamline operations.
Its workforce nearly tripled from 2019 to 2023, and the company had reduced staffing by more than 14% from 2023 levels before this announcement. Yet this week, Block said it was working from a position of strength, highlighting gross profit of $10.36 billion in 2025, up 17% year-over-year.
The scale and speed of Block's cuts second Elon Musk's approach when he slashed roughly 50% of Twitter's staff in November 2022 after taking the company private.
Dorsey was in an unusual position to watch it unfold, having rolled his roughly 2.4% ownership stake in Twitter into Musk's takeover rather than taking a cash payout.
What Triggered This Decision?
On a 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."
Block CFO Amrita Ahuja said the cuts will position the company to "move faster with smaller, highly talented teams using AI to automate more work."
Block has been restructuring its business model and staffing since 2024 as the company's stock lagged, falling around 40% since the beginning of 2025. At the same time, the company invested heavily in AI tools to run more efficiently, including building its own tool called Goose.
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.
Block's cuts are the latest case of workforce reductions across fintech and the broader technology sector, with companies from Amazon to Salesforce citing AI as justification for shrinking headcounts.
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.
The report triggered a selloff that erased billions in market value before a tentative rebound. For Block, which straddles both payments and fintech, the Citrini scenario lands close to home.
Industry leaders have been warning of fundamental erosion in white-collar work. Anthropic CEO Dario Amodei has sounded the alarm about a looming white-collar "bloodbath," while Meta CEO Mark Zuckerberg has said AI is reshaping what individual employees can achieve.
Klarna CEO Sebastian Siemiatkowski said its workforce has halved over the last four years and expects the company's workforce to drop below 2,000 by 2030, down from 7,000 in 2022. Jessica Verrilli, managing director and cofounder at Adverb Ventures, said in a post on X. "Feels inevitable this is about to ripple through every public company."
While the World Economic Forum's 2026 Global Risk report predicts that 92 million workers will be displaced by 2030, it also said 170 million roles will be created in that time frame, resulting in a net increase.
Michael Blank, an assistant professor of finance at Stanford Business School, said there could be a race among CEOs to convince investors that their companies are better positioned than their rivals to adopt abruptly changing AI technologies. Mass layoffs could potentially be an inexpensive way to signal that.