Jack Dorsey, the co-founder of Twitter, has cut more than 4,000 jobs at his financial technology company Block — which operates Cash App, Square and Tidal — reducing headcount from over 10,000 to under 6,000 in an AI-driven restructuring that sent the stock surging more than 24% in after-hours trading Thursday.
What Happened: Block Halves Workforce
Dorsey announced the layoffs alongside Block's fourth-quarter earnings, which showed revenue of $6.25 billion and gross profit of $2.87 billion, up 24% from a year earlier. Adjusted earnings per share came in at 65 cents, up from 47 cents in the same period last year.
The company raised its 2026 outlook, guiding for full-year adjusted earnings of $3.66 per share — well above the $3.22 analysts had expected, according to LSEG.
Block said it expects to incur $450 million to $500 million in restructuring charges, primarily in the first quarter.
Dorsey stressed in a post on X that the cuts were not a sign of financial distress. "Our business is strong. Gross profit continues to grow," he wrote, adding that AI tools paired with smaller teams "are enabling a new way of working which fundamentally changes what it means to build and run a company."
Employees who lost their positions will receive 20 weeks of salary plus one additional week per year of tenure, six months of health care coverage and $5,000 in transition support. Block employees described to The New York Times a company-wide virtual meeting about the cuts during which Dorsey was met with dozens of "thumbs down" emojis.
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Why It Matters: AI Replaces Workers
Block is part of a broader pattern of major technology companies cutting staff while investing heavily in AI. Amazon laid off roughly 14,000 workers in Oct. 2024 and another 16,000 in January, with executive Beth Galetti citing CEO Andy Jassy's push to "operate like the world's largest startup." Swedish fintech firm Klarna has reduced its workforce by about half since 2022, though largely through attrition rather than mass layoffs.
Dorsey signaled the trend is far from over.
"Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he wrote in his letter to shareholders.
The scale of Block's cuts and the market's enthusiastic response have raised questions about whether AI-driven layoffs are becoming a template for the industry. "To those of you leaving…i'm grateful for you, and i'm sorry to put you through this," Dorsey wrote.
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