Block, the financial technology company behind payment platforms including Square and Cash App, said Friday it plans to lay off more than 4,000 people from a workforce of a little more than 10,000, pointing to productivity gains from artificial intelligence as a key driver of the change.
Chief Executive Jack Dorsey said in a letter to shareholders that “intelligence tools have changed what it means to build and run a company.” Dorsey told shareholders that “A significantly smaller team, using the tools we’re building, can do more and do it better,” framing the workforce reduction as part of a broader reconfiguration rather than a purely cost-cutting exercise.
Dorsey’s letter and his remarks also appeared on X, where he previously co-founded the social media platform. Investors responded quickly to the explicit link the company made between AI and staffing decisions, sending Block shares higher in premarket trading, where they rose more than 20% before the company later reported earnings.
On Thursday, Block shares had gained 5% to $54.53 before it reported its fourth-quarter results, and its after-hours performance later pushed the stock to nearly $69, according to the report. Block’s fourth-quarter gross profit rose 24% from a year earlier, underscoring that the company’s decision came as it was also reporting improvements in profitability.
Stephen Innes of SPI Asset Management said in a commentary that Block provided “a public case study” because the CEO “explicitly says” that intelligence tools have changed how companies build and run themselves. Innes tied the market’s reaction to the idea that investors were able to connect AI use with expected operational and efficiency benefits.
The company’s disclosure also landed amid a broader period of corporate layoffs. Other large employers have announced tens of thousands of cuts in recent months, the report said, and some employers had downplayed any connection to AI while Block did not. As covered in MSI previously reported that some companies tie AI to layoffs, but reality is more complicated, the debate often turns on whether job reductions reflect AI adoption or other pressures.
In a separate post on X, Dorsey said Block would support workers affected by the job cuts, and he added that the terms might differ for employees overseas. The report said it was unclear which employees would be laid off in which locations.
Block, a global technology company founded in 2009, is based in San Francisco and operates in the United States, Canada, parts of Europe, Australia and Japan. The report said layoffs by American companies remained at relatively healthy levels overall, but Block’s announcement stood out as the latest and it explicitly named AI as part of the rationale behind the cuts.