Block Lays Off Over 4,000 Staff, Citing AI
Jack Dorsey's company Block laid off over 4,000 employees, nearly half its staff, explicitly attributing the decision to artificial intelligence. Dorsey predicted that most companies will make similar cuts within the next year, signaling a significant acceleration of AI-driven workforce reductions. The move follows other recent large-scale tech layoffs at companies like Amazon and WiseTech.
The move is not a sign of financial distress; Block's gross profit grew 24% in the fourth quarter, and the company raised its 2026 profit growth forecast. Following the layoff announcement, the company's shares surged more than 23% in after-hours trading, with analysts attributing the jump to expectations of improved profit margins. Jack Dorsey stated the decision was to avoid "destructive" morale damage from multiple, smaller layoffs over time. He also acknowledged that significant pandemic-era hiring contributed to the situation, with staff growing from roughly 3,900 in 2019 to over 12,500 by the end of 2022. The restructuring aims to quadruple gross profit per employee from a pre-pandemic baseline of $500,000 to over $2 million. This is the first time Block has officially cited AI as the primary reason for job cuts, despite previous rounds of layoffs. The company anticipates the restructuring will cost between $450 million and $500 million, largely for severance packages. Affected employees are being offered a base of 20 weeks' salary, with an additional week for each year of service. The trend extends beyond Block. Australian software company WiseTech Global recently announced plans to cut nearly a third of its 7,000-person workforce over the next two years, also citing an AI-driven pivot. WiseTech's CEO noted that some projects that once took months can now be completed in a single day with AI, and that some teams could be halved.
