Block Cuts 40% of Workforce in AI Push
Jack Dorsey's Block is cutting nearly 4,000 jobs — roughly 40% of its staff — in a dramatic restructuring. Dorsey is framing the move as an AI-led push for efficiency, not just a cost-cutting measure. In response, laid-off employees have already formed a 3,800-strong "Square Mafia" Slack group to network and share opportunities.
The move to slash Block's workforce from over 10,000 to just under 6,000 comes despite a strong financial quarter, with gross profit up 24% year-over-year. Dorsey's rationale is a proactive shift towards smaller, more agile teams supercharged by artificial intelligence, a move he predicts most companies will make within the next year. The market reacted favorably, with Block's stock jumping approximately 25% in after-hours trading following the announcement. This restructuring is the culmination of an internal push toward becoming an "AI-native" company, a vision sparked by an "AI Manifesto" from then-senior engineer Dhanji R. Prasanna, who is now the CTO. A key element of this strategy was a major organizational change, shifting from separate business units for products like Square and Cash App to a unified functional structure for departments like engineering and design. At the heart of Block's AI strategy is an internal, open-source AI assistant named "Goose." This tool is already saving employees an average of 8 to 10 hours per week by handling tasks ranging from writing code to automating workflows. The most significant productivity gains have reportedly been seen in non-technical departments such as legal, risk management, and operations, where staff can now build their own software tools. While AI is the stated reason, some analysts point to Block's rapid expansion during the pandemic—growing from roughly 3,800 employees in 2019 to over 10,000 in 2025—as a contributing factor to the massive cuts, framing the layoffs as partially a correction for over-hiring. The company had already conducted smaller, performance-based layoffs in the months prior. For those affected, Block is offering a severance package that includes 20 weeks of base salary, plus an additional week for every year of service. The package also provides six months of healthcare coverage and a $5,000 cash stipend. The "Square Mafia" Slack channel, which predates these layoffs, was created in 2016 for former employees to network. It has since become a crucial resource for the thousands of recently laid-off workers to connect and share job opportunities.
