Block, the fintech company behind Square and Cash App, has initiated one of the most aggressive workforce reductions in recent tech history. On Thursday, the firm informed more than 4,000 employees, representing about 40% of its total headcount, that they would be leaving or entering consultation processes. This action drops the company’s employee count from over 10,000 to just under 6,000.
CEO Jack Dorsey framed the decision as a proactive response to transformative AI capabilities rather than a reaction to financial distress. In a letter to shareholders and posts on X, Dorsey explained that “intelligence tools have changed what it means to build and run a company.” He emphasized that a smaller, highly talented team paired with advanced AI can deliver superior results, with these tools improving rapidly each week.
The move coincides with solid business performance. Block matched fourth-quarter earnings expectations, reported growth in Cash App’s monthly active users to 59 million, and highlighted a 22% year-over-year increase in users relying on the app for primary banking services. The company projects its adjusted operating profit margin to climb to 26% in 2026 from 17% in 2025, driven by a leaner expense structure.
Investors responded positively. Block shares surged more than 18% in after-hours trading on Thursday and continued gains into Friday, reflecting confidence in the efficiency gains. Analysts noted the overhaul positions Block favorably, with higher gross profit per employee compared to peers.
This restructuring arrives amid heightened discussion about AI’s broader effects on employment. Dorsey asserted that within the next year, most companies will reach similar conclusions and implement major structural changes, preferring to act decisively rather than through repeated smaller cuts that harm morale and trust.
The layoffs echo themes from a recent viral analysis by Citrini Research titled “The 2028 Global Intelligence Crisis.” Written as a retrospective from the future, the report envisions a scenario where AI-driven white-collar job losses starting in early 2026 lead to expanded margins initially, followed by economic strain, including potential unemployment above 10% and a deflationary spiral. Citrini co-author Alap Shah described Block’s action as a “textbook example” of the shifts the paper warned about, noting how companies can boost output while slashing coordination costs.
Market reactions have been mixed. While some software stocks faced pressure earlier in the week amid AI disruption fears, Block’s announcement sparked a rally in its shares. Skeptics, including analysts at Citadel Securities, have challenged doomsday views by pointing to rising software engineering job postings and arguing that widespread displacement would require immense computing resources, potentially making human labor more cost-effective in certain areas.
Block’s approach avoids gradual reductions, which Dorsey said erode focus and credibility. The company offers support packages, including severance, to affected employees.
As AI adoption accelerates across industries, Block’s decisive step highlights a pivotal tension: short-term corporate gains from efficiency often boost stock prices and investor enthusiasm, yet widespread job reductions could challenge consumer spending and economic stability if not offset by new opportunities. Dorsey’s prediction of industry-wide restructuring underscores the speed of change, leaving observers watching whether this marks an isolated bold move or the start of a larger trend in tech and beyond.
