Block, the fintech company that owns Square, Cash App and Afterpay, is making one of the most dramatic workforce reductions in its history — cutting roughly 40% of its staff, or more than 4,000 jobs.
In a letter to shareholders, co-founder Jack Dorsey said the decision reflects a shift in how the company plans to operate in the age of artificial intelligence. The layoffs will shrink Block’s workforce to just under 6,000 employees.
Dorsey’s message was blunt: technology is moving fast, and companies that don’t adapt will fall behind. “A significantly smaller team, using the tools we’re building, can do more and do it better,” he wrote, pointing to what he described as rapidly compounding “intelligence tool capabilities.”
Not A Crisis Move, Dorsey Says
The timing of the cuts has raised eyebrows, especially as Block has reported steady growth. Dorsey, co-founder of Twitter, insisted the layoffs are not a response to financial trouble. “Our business is strong… gross profit continues to grow,” he posted on X, pushing back against the idea that the company is downsizing out of distress.
Chief Financial Officer Amrita Ahuja echoed that thinking in Block’s financial guidance, stating that the company sees an opportunity to move faster with smaller, highly skilled teams that rely more heavily on AI to automate tasks.
In other words, Block believes it can achieve more with fewer people — if those people are equipped with the right tools.
A Broader Tech Industry Shift
Block’s move is part of a larger trend sweeping Silicon Valley. Over the past year, tech giants including Amazon, Meta, Microsoft and Verizon have trimmed their workforces, often tying the restructuring to AI-driven efficiencies.
Many of these companies expanded aggressively during the pandemic, when demand for digital services surged. Block is no exception. It employed 3,835 people at the end of 2019, but that number ballooned to over 10,000 before this week’s cuts. Now, like others in the sector, it is scaling back toward pre-pandemic levels.
Meta, for instance, nearly doubled its headcount in just two years before initiating layoffs. The current wave suggests tech leaders are reassessing what an optimal workforce looks like in an AI-powered future.
Dorsey appears convinced that most companies will soon follow Block’s lead. “I think most companies are late,” he wrote, predicting that within a year, many firms will make similar structural changes. He added that he would rather move decisively now than be forced into gradual cuts over months or years.
The affected employees will receive severance of at least 20 weeks, depending on tenure, equity vesting through the end of May, six months of healthcare coverage, an additional $5,000, and the option to keep company devices.
Investors Applaud
Wall Street responded enthusiastically. Block’s shares jumped as much as 24% following the announcement, signaling investor approval of a leaner, AI-focused operating model.
The layoffs also come at a time when AI developers such as Anthropic and OpenAI are rolling out increasingly advanced enterprise tools. Anthropic recently upgraded its Claude model to better handle office-related tasks in areas like human resources, design and wealth management — developments that underscore how quickly AI capabilities are evolving.
Amazon has described AI as the most transformative technology since the internet and said it needs fewer layers of management to operate at speed. That sentiment now seems widely shared among tech executives.
For employees across the tech sector, Block’s decision is another reminder that AI is not just a product feature — it is reshaping corporate structures. Whether this shift ultimately creates more jobs than it eliminates remains an open question.
For now, Block is placing a bold bet: that a smaller workforce empowered by AI can outperform a much larger one. And with more than 4,000 people set to leave, that bet carries real human consequences.
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