Jack Dorsey's Block cuts roughly 50% of jobs as it embraces AI and shares jump
Block CEO Jack Dorsey has announced a radical restructuring that will see nearly half of the company’s workforce made redundant. Shares surged by 23.5% in after-hours trading.
In a move that has sent shockwaves through the fintech sector, Jack Dorsey, the co-founder and CEO of the fintech conglomerate Block, formerly known as Square, has unveiled the most aggressive corporate downsizing in the company’s history.
Block Inc. comprises several major fintech brands, namely the mobile payment service Cash App, which is widely used in the US.
In a detailed note to the company, shared via X, Dorsey confirmed that the organisation will reduce its headcount by approximately 50%, representing almost 4,000 jobs.
According to the CEO, the decision is not a sign of financial distress but rather a strategic evolution aimed at "re-centring" the company around a more efficient, AI-driven model.
The news had an immediate and profound impact on Wall Street.
Block’s share price, under the ticker $XYZ, surged by 23.5% in after-hours trading as investors reacted with overwhelming optimism to the prospect of leaner operations.
This shift reflects a broader trend within the tech and finance industries, where companies are increasingly using AI to "do more with less".
However, the scale of Block’s cuts is particularly striking. While many firms have implemented 5 or 10% reductions, Dorsey’s decision to axe nearly half the workforce signals a total commitment to a new and automated era of corporate management.
AI efficiency
The central pillar of Dorsey's new strategy is the integration of generative AI and other automated systems into the core of Block’s workflow.
According to the note sent to employees, the former Twitter CEO believes that the rapid advancement of AI tools has rendered large, multi-layered corporate structures obsolete.
Dorsey argued that "smaller and smarter" teams can now achieve outcomes that previously required hundreds of personnel.
"We no longer need the mass of people we once did to maintain our velocity," the Block CEO wrote in the memo highlighting that AI-assisted coding and compliance systems, as well as automated customer support, have significantly reduced the man-hours required to run a global financial platform.
By leveraging these technologies, Block intends to maintain its current product output while drastically reducing its overhead costs.
Analysts suggest that this could save the company billions of dollars annually, with some estimates putting the potential savings already at $1.2bn (€1bn) this fiscal year.
For a company that has long been at the forefront of digital payments and crypto, this AI pivot represents a significant departure from traditional scaling methods.
The sheer scale of the layoffs raises the notion that we are perhaps entering the accelerated stage of AI driving people out of work.
It is still early days in 2026 and companies are seemingly starting to make substantial restructurings instead of just small and strategic firings. The socio-economic shocks of the AI revolution now appear to be materialising in a very concerning and real way.
No comments:
Post a Comment