Jack Dorsey's Block lays off half its staff
What's the story
Jack Dorsey's financial technology company, Block, is laying off nearly half of its workforce. The move will see over 4,000 employees let go and reduce the company's headcount from over 10,000 to under 6,000. Dorsey announced the decision in a post on X, saying that the layoffs are part of an artificial intelligence (AI) gamble.
AI impact
Layoffs not due to financial troubles
Dorsey clarified that the decision to lay off employees isn't because Block is in trouble. He said, "Our business is strong. Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving." However, he also noted that the intelligence tools being developed are enabling a new way of working which fundamentally changes what it means to run a company.
Strategic approach
'Block will be significantly more valuable as a smaller company'
Dorsey chose to make a big layoff instead of gradual cuts because he believes in taking "hard, clear action now and build from a position we believe in." The layoffs were announced as part of the company's Q4 2025 earnings. In a shareholder letter, Dorsey said, "We believe Block will be significantly more valuable as a smaller, faster, intelligence-native company."
Market reaction
Stock surges by 27% in extended trading
Following the layoff announcement, Block's stock surged by as much as 27% in extended trading. The company has been restructuring its business model and staffing since 2024 due to lagging stocks. Despite these challenges, Dorsey is optimistic that other companies will have to make similar moves due to AI within the next year.
AI investment
AI tools making specific roles redundant
Block has invested heavily in AI tools to improve efficiency, including its own tool called Goose. However, the company has not given much detail on how these tools are making specific roles redundant. Some analysts have questioned if companies are really being transformed by AI or just using it as a convenient excuse for cost cuts they would have made anyway.
Financial outlook
Strong financial performance amid challenges
Despite the challenges posed by AI, Block has reported strong financial performance over 2025. The company's gross profit grew significantly, with a 17% year-over-year (YoY) increase. Dorsey emphasized the company's growth in user base for its peer-to-peer payments app Cash App, expansion of lending products, and acceleration of Square gross payment volume.