Block lays off 4,000 employees as Jack Dorsey bets on AI-powered leaner teams; stock jumps 24%

Block is making one of the boldest workforce moves of the AI era.

The payments company said Thursday it will cut more than 4,000 employees, nearly half its workforce, as CEO Jack Dorsey pushes the company toward smaller teams supported by automation and what he calls “intelligence tools.” Investors welcomed the move. Block shares surged more than 24% in extended trading after the announcement.

“Today we shared a difficult decision with our team,” Jack Dorsey, Block’s co-founder and CEO, wrote in a letter to shareholders. “We’re reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation.”

we’re making @blocks smaller today. here’s my note to the company.

####

today we’re making one of the hardest decisions in the history of our company: we’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are…

— jack (@jack) February 26, 2026

Block slashes 4,000 jobs in AI pivot, says most companies will soon follow

The cuts arrive at a moment when Block’s core business is still growing. In the same earnings report, the company posted adjusted earnings per share of 65 cents on revenue of $6.25 billion, matching or slightly beating analyst expectations tracked by LSEG. Gross profit climbed 24% year over year to $2.87 billion, CNBC reported.

Block’s finance chief framed the layoffs as a strategic reset rather than a reaction to weak performance. CFO Amrita Ahuja wrote that the move positions the company “for our next phase of long term growth.”

“We are choosing to shift how we operate at a time when our business is accelerating, and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work,” Ahuja wrote.

Dorsey has been increasingly direct about the role automation will play across corporate America. He told shareholders he expects many companies to reach the same conclusion soon.

“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” Dorsey said. “I’d rather get there honestly and on our own terms than be forced into it reactively.”

The CEO repeated that view in a post on X, describing the decision as a choice between gradual reductions over time or a single decisive move. He opted for speed.

“I chose the latter,” Dorsey wrote. “Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead.”

Block reported 10,205 employees worldwide as of December 31, 2025, according to its annual filing. The restructuring is expected to cost between $450 million and $500 million, largely tied to severance, benefits, and share-based compensation, the company said in a securities filing. Most of those charges should land in the first quarter.

The move places Block alongside a growing group of tech companies openly tying workforce reductions to AI adoption. Firms including Pinterest, CrowdStrike, and Chegg have all pointed to automation as a factor in recent layoffs.

For now, investors appear convinced the strategy could improve operating leverage. The next test will be execution: whether a smaller, AI-heavy organization can keep product momentum and revenue growth moving in the same direction.