Jack Dorsey’s payments firm Block will lay off more than 4,000 employees, with the co-founder attributing the decision to the rapid acceleration of artificial intelligence and its impact on how companies operate, according to a letter he shared on X.
“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company, and that’s accelerating rapidly,” Dorsey wrote in a letter to employees that he later shared on X.
Dorsey said he chose to implement the reductions immediately rather than over time.
“I had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” he added.
Block employs more than 10,000 workers, and just under 6,000 will remain after the reductions. Employees will be notified whether they are losing their jobs or entering consultation.
Affected staff will receive 20 weeks of salary plus an additional week for each year of tenure, six months of health care coverage, their corporate devices, and an extra $5,000 for personal needs.
The company said it may incur up to $500 million in restructuring costs as it transitions to the new strategy.
AI reshaping company structures across tech
Dorsey framed the layoffs as part of a broader shift across the technology sector.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” he wrote to shareholders. He added, “I don’t think we’re early to this realization. I think most companies are late.”
Block will prioritize streamlined operations powered by automation, aiming to accelerate product output and enable users to build their own features on the company’s platform.
The company’s headcount had expanded rapidly in recent years.
Financial data from Macrotrends shows Block grew from about 3,835 employees in 2019 to a peak of 12,985 in 2023, a 237% increase.
The move reflects a wider industry trend.
Amazon, Meta, Microsoft, and Google have also cut jobs while increasing AI investment.
Meta chief executive Mark Zuckerberg recently said he expects “2026 to be the year that AI dramatically changes the way we work,” noting that “We’re starting to see projects that used to take big teams now be accomplished by a single, very talented person.”
Many technology companies now rely on software capable of writing code automatically, including tools such as Claude Code and Codex, fueling concerns about potential labor disruption.
Financial results and market reaction
Despite the workforce reductions, Block reported strong operating performance.
For the fourth quarter of 2025, the company posted gross profit of $2.87 billion, up 24% year over year. Cash App revenue rose 33% year over year to $1.83 billion.
Block’s stock responded positively. Shares surged more than 23% in after-market trading to $67.36.
Dorsey said the restructuring followed a full review and pressure test of the organization.
He also predicted additional change ahead as AI capabilities expand and reshape corporate structures and job requirements.
Block, which owns Square, Cash App and Tidal, has conducted several layoffs since 2024, but this is the first time the company has explicitly cited artificial intelligence as the primary reason for redundancies.
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