TLDR
- Block to reduce workforce from over 10000 to under 6000 employees
- Stock jumps nearly 25% after stronger earnings guidance
- Q1 operating income forecast at 600 million above estimates
- Affected staff to receive 20 weeks pay and six months health coverage
Jack Dorsey said Block will cut more than 40% of its workforce as the company posted strong earnings and saw its stock surge 25% in post market trading. The decision will reduce headcount from over 10,000 employees to just under 6,000.
The restructuring was announced in a note shared on X and released with the company’s earnings report. The move affects more than 4,000 workers across the company.
Workforce Reduction Plan
Block confirmed that the layoffs are not due to financial distress. The company reported improving profitability and continued gross profit growth. Dorsey said changes in intelligence tools and flatter teams are reshaping how the company operates.
He wrote that the company chose a single large reduction instead of repeated smaller cuts. He said this approach would avoid ongoing uncertainty and protect trust within the company.
The company stated that affected employees will receive 20 weeks of salary. They will also receive one additional week for each year of service. Equity will vest through the end of May, and six months of health coverage will be provided.
Block added that workers can keep their company devices and will receive $5,000 in transition support. Benefits may vary outside the United States.
Earnings Beat Expectations
The workforce reduction came alongside stronger than expected financial results. Block projected first quarter operating income of $600 million. Analysts had expected $574 million.
The company also forecast gross profit of $2.8 billion for the quarter. This figure exceeded the consensus estimate of $2.72 billion. Full year gross profit is now expected to reach $12.2 billion, which marks an 18% increase from the prior period.
Cash App monthly active users surpassed expectations. However, quarterly revenue of $6.25 billion came in slightly below the $6.29 billion consensus estimate.
Shares rose about 5% during regular trading hours. After the earnings release and restructuring note, the stock climbed nearly 25% in post market trading.
Strategic Shift Toward Intelligence Tools
Dorsey said advances in intelligence tools are changing how work is done at Block. He stated that the company aims to build smaller and more focused teams.
He wrote that intelligence will be at the core of operations going forward. The restructuring is designed to align staffing with this approach.
Block said it expects stronger profit growth despite the workforce reduction. The company maintained that the cuts are part of a broader strategy and not a response to weak demand.
The announcement places Block among major technology firms adjusting headcount while reporting solid earnings. Investors responded positively to the updated financial outlook and cost structure changes.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
