Block Slashes Nearly Half Its Staff
Jack Dorsey's Block, parent of Square and Cash App, has laid off 4,400 employees — nearly 50% of its workforce. Unlike past tech layoffs blamed on over-hiring, Dorsey explicitly cited AI making roles unnecessary, a move analysts are calling a watershed moment for AI's impact on employment. Laid-off staff have already formed an alumni group called the "Square Mafia" to network, while eBay also announced it's cutting several hundred jobs.
Block's decision to cut over 4,000 jobs was announced alongside a strong fourth-quarter financial report, where the company beat Wall Street expectations with $6.25 billion in total revenue and a 24% increase in gross profit year-over-year. The move, which reduces the workforce from over 10,000 to under 6,000, was framed by CEO Jack Dorsey not as a cost-saving measure, but as a strategic shift to smaller, more efficient teams augmented by AI. The market reacted positively to the news, with Block's shares surging over 20% in pre-market trading following the announcement. The company projected a 2026 gross profit of about $12.2 billion and raised its adjusted earnings per share target, signaling confidence to investors. The restructuring is expected to cost Block between $450 million and $500 million, primarily in severance payments. Laid-off employees are being offered 20 weeks of base pay, plus an additional week for each year of service. They will also receive six months of healthcare coverage and a $5,000 transition payment. During a company-wide virtual meeting about the layoffs, Dorsey was reportedly met with dozens of "thumbs down" emojis from employees. Some analysts are skeptical that AI is the sole reason for the deep cuts, pointing to Block's rapid pandemic-era hiring as a contributing factor. The company's headcount had more than tripled in under four years, a growth rate that Dorsey himself acknowledged in late 2023 had "far outpaced the growth of our business and revenue." This round of layoffs follows several smaller cuts over the previous two years. The term "Square Mafia" has historically referred to a powerful network of former employees who went on to found successful tech companies like DoorDash, Opendoor, and Faire, creating billions in startup value. The new alumni group adopts this name as a networking resource for the thousands of newly displaced workers seeking their next opportunity. Meanwhile, eBay's cut of approximately 800 jobs represents about 6% of its global workforce and is its third round of layoffs since 2023. The e-commerce giant cited a need to align its structure with strategic priorities, including increased investment in artificial intelligence and automation. This move comes shortly after eBay announced its $1.2 billion acquisition of the fashion resale app Depop.
