TLDR
- Block (XYZ) plans to cut approximately 4,000 jobs, slashing nearly 40% of its workforce and bringing total employees down to roughly 6,000
- CEO Jack Dorsey cites artificial intelligence efficiency gains as the primary driver, claiming smaller teams can achieve greater output
- Stock price jumped over 31% to $96.58 following the layoff announcement combined with strong quarterly performance
- Q4 2025 gross profit hit $2.87 billion, up 24% compared to the previous year; Cash App revenues increased 33%
- Affected employees receive severance package including 20 weeks base salary, tenure-based bonuses, six months medical coverage, and $5,000 stipend
Jack Dorsey’s fintech enterprise Block is cutting approximately 4,000 jobs — nearly 40% of its total workforce.
The company, which employed around 13,000 people at its 2023 peak, will reduce headcount to approximately 6,000 workers after implementing these cuts. This workforce size closely mirrors the company’s 2019 employee count of roughly 3,835 before pandemic-era expansion.
In a public statement shared on X, Dorsey connected the downsizing directly to artificial intelligence advancements being integrated across the company’s operations.
“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,” he wrote.
Dorsey defended his approach of executing one major reduction rather than implementing gradual cuts over an extended period, arguing that repeated layoff rounds damage company culture and employee confidence.
Affected workers will receive severance benefits comprising 20 weeks base pay, one additional week per year of employment, six months of continued healthcare coverage, retention of company hardware, and a $5,000 personal support payment. Layoff notifications began the same day the announcement was published.
Dorsey anticipates widespread industry adoption of similar measures. “I don’t think we’re early to this realization. I think most companies are late,” he commented, predicting most organizations will reach identical conclusions within the next year.
Block’s workforce grew 237% between 2019 and 2023 according to Macrotrends data. This reduction represents the largest single workforce cut in company history — far exceeding the 10% reduction Bloomberg previously reported the company was considering earlier in the month.
Stock Jumps on Cuts and Strong Earnings
Block (XYZ) shares surged more than 31% to $96.58 during morning trading, up from the previous day’s close of $73.65.
The layoff news arrived alongside Block’s fourth quarter 2025 earnings report. The company posted gross profit of $2.87 billion, representing 24% growth year-over-year. Cash App generated $1.83 billion in revenue, up 33% compared to the same period last year.
Investors reacted enthusiastically to the combined news, though shares remain roughly 80% below their all-time high reached during the pandemic.
Stablecoins Add a Structural Question
While Dorsey’s statement focuses on AI-enabled productivity gains, some market analysts point to another fundamental challenge: emerging stablecoin payment systems.
Block built its core business model on credit card processing fees, typically charging 2% to 3% per transaction. Stablecoin technology enables similar payment processing at near-zero costs, potentially undermining traditional fee structures.
Citrini Research analysis suggests that “agentic shopping” — AI systems autonomously routing payments — could accelerate the shift away from conventional card payment rails.
The GENIUS Act combined with Circle’s IPO have advanced stablecoin mainstream adoption considerably, making this competitive threat more immediate than during Block’s growth years.
Some skeptics question the AI narrative. Ben Carlson, director at Ritholtz Wealth Management, posted on X: “Or maybe the stock is down 80% from the highs and they overhired and AI is a convenient excuse.”
Block’s Q4 gross profit of $2.87 billion and Cash App’s 33% revenue growth represent the most recent financial performance data available.
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