Block Cuts 4,000 Jobs, Citing AI Efficiency in Dramatic Restructuring
Company says 40% workforce reduction driven by artificial intelligence tools, sparking investor enthusiasm and employee outrage
Block, the financial technology company behind Square, Cash App and Tidal, announced Thursday it is eliminating approximately 4,000 positions — 40% of its workforce — in what CEO Jack Dorsey described as a decisive response to artificial intelligence’s transformative impact on business operations.
The layoffs represent one of the most significant corporate restructurings explicitly attributed to AI adoption, with Dorsey arguing that new intelligence tools fundamentally change “what it means to build and run a company.”
“Something has changed,” Dorsey wrote in a social media post announcing the cuts. “We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working… and that’s accelerating rapidly.”
Rather than implementing gradual reductions, Dorsey said he chose to act immediately: “I’d rather get there honestly and on our own terms than be forced into it reactively.”
Market Rewards, Employees Revolt
While the announcement sparked anxiety across the tech sector, investors celebrated Block’s aggressive efficiency push. The company’s share price surged more than 26% in after-hours trading, coinciding with strong quarterly financial results.
The internal response proved less enthusiastic. During an all-hands video call following the announcement, dozens of employees flooded the screen with “thumbs down” emoji reactions as Dorsey — wearing a black cap reading “LOVE” — defended his decision and fielded hostile questions.
One employee challenged Dorsey’s fashion choice, questioning whether wearing the hat while terminating nearly half the company was appropriate, according to two participants who spoke on condition of anonymity.
The AI Efficiency Argument
Block’s workforce had grown substantially in recent years, reaching 10,205 full-time employees globally by the end of 2025, up from 5,477 at the close of 2020. The company expects the restructuring to cost between $450 million and $500 million.
Dorsey positioned the cuts as forward-looking, predicting widespread adoption of similar strategies across corporate America. “I think most companies are late,” he wrote. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”
The announcement intensifies ongoing debates about AI’s impact on white-collar employment, a topic drawing attention from Silicon Valley executives to political figures including Senator Bernie Sanders. While many programmers currently view AI as a complementary tool rather than replacement, executives increasingly bet on rapid capability improvements, particularly as AI code generators automate diverse tasks.
“A significantly smaller team, using the tools we’re building, can do more and do it better,” Dorsey wrote. “And intelligence tool capabilities are compounding faster every week.”
Block’s spokeswoman directed inquiries to Dorsey’s social media post and his letter to shareholders.
About The Author
