Block Inc. Shares Rocket 5% as Jack Dorsey Announces Radical 40% AI-Driven Workforce Cut
Block Inc. (XYZ) shares surge more than 23% after hours as investors cheer sweeping restructuring and strong Q4 2025 earnings
Quick overview
- Block Inc. will lay off about 4,000 employees, representing 40% of its workforce, in a significant AI-driven reorganization.
- CEO Jack Dorsey emphasized that a smaller team can leverage AI tools to enhance productivity and efficiency.
- The company's stock surged over 23% following the announcement, reflecting investor optimism despite the layoffs.
- Dorsey predicts that many businesses will adopt similar structural changes in the near future as they adapt to AI advancements.
The fintech giant Block Inc. (NYSE: XYZ), which owns Square, Cash App, and Afterpay, said Thursday that it will lay off about 4,000 employees, or about 40% of its whole workforce, in one of the most drastic AI-driven reorganizations in recent tech history. Jack Dorsey, co-founder and CEO, presented the move as a calculated wager on how businesses will function in the future rather than as an indication of concern.
The AI Transformation: Why 4,000 Jobs Are Being Cut
“A significantly smaller team, using the tools we’re building, can do more and do it better,” Dorsey wrote in a letter to shareholders that was posted on X. “Intelligence tool capabilities are compounding faster every week.”
Block’s workforce will drop from over 10,000 to just under 6,000 as a result of the downsizing. According to Dorsey, the decision was made after a thorough “pressure test” of the business’s operations and a review of its organizational structure. He provided them with a severance package that included their company equipment, a $5,000 personal stipend, six months of health insurance, and 20 weeks of base pay plus an extra week for each year of service.
Dorsey was straightforward about his timeline and his logic. “I don’t believe this knowledge is too early. “I believe the majority of businesses are late,” he wrote. “I think most businesses will come to the same conclusion and implement comparable structural adjustments within the next year. Instead of being pushed into it reactively, I’d want to go there truthfully and on our own terms.
The announcement’s scope is remarkable, but it follows a larger trend in the tech industry. AI has been increasingly mentioned as a factor in the large personnel reductions that Amazon, Meta, Microsoft, and Verizon have all made in recent years. As a result of their fast expansion during the pandemic, many of these organizations, like Block, are now reverting to their leaner pre-pandemic structures. Block’s headcount increased by 237% between 2019 and 2023, from approximately 3,835 personnel to nearly 13,000 at its peak.
In the financial projections provided by the firm, Block CFO Amrita Ahuja echoed Dorsey’s ambition, saying, “We see an opportunity to move faster with smaller, highly talented teams using AI to automate more work.”
Block (XYZ) Financials Surge: Strong Q4 Results Fuel Investor Optimism
Investors gave a resounding response. After the announcement, Block’s stock, which had ended at $54.53 on Thursday, surged more than 23% to $67.36 in after-hours trading. According to earlier accounts, when the news emerged along with impressive earnings figures, the stock jumped as high as 31% at market opening.
These findings supported Dorsey’s assertion that the cutbacks are a calculated decision rather than a distress signal. While Cash App reported a 33% year-over-year gain in sales to $1.83 billion, Block reported a 24% year-over-year increase in gross profit of $2.87 billion for the fourth quarter of 2025.
According to Dorsey, Block’s future plans will center on AI-powered, streamlined operations and a platform architecture that lets users create their own features on top of the business’s infrastructure. He believes that this vision can be implemented with fewer personnel.
It remains to be seen if Dorsey’s prediction that the majority of significant corporations will follow Block’s example within the year turns out to be accurate. But Block is loudly arguing that the era of big corporate headcounts may be coming to an end, with Wall Street praising the move and earnings going in the right way.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Save