Block has let go of 40% of its workforce, leaving just under 6,000 employees. Jack Dorsey, the company’s cofounder and CEO, has cited the use of intelligence tools in the company’s operations as a reason for the massive layoffs.
Despite Jack Dorsey stating that the layoffs are to streamline operations, he has been accused of using AI as a cover for the cleanup of his hiring spree from 2019 through 2022.
Is AI taking jobs, or did Jack Dorsey make a mistake?
Jack Dorsey’s Block announced that it will cut over 4,000 employees, bringing its total staff to just under 6,000. Between 2019 and 2022, the company had a hiring spree that saw its employee headcount more than triple from 3,900 to 12,500.
Despite the significant blow to the workforce, investors celebrated the news by giving Block a 25% bump in stock price.
Dorsey, the company’s cofounder and CEO, addressed staff in a memo, bluntly stating that the company had become too big, too slow, and too fragmented. Rather than spread the reductions over years and destroy morale, he chose a single, large-scale cut.
In Dorsey’s memo, he stated that Block was efficiently carrying out its operations with intelligence tools and “smaller and flatter teams” as the reason behind the layoffs, but he also admitted that during the pandemic, he incorrectly built two separate company structures for Square and Cash App and created a duplication of roles that resulted in massive complexity.
A debate about whether or not artificial intelligence is to blame for the massive layoffs or if it’s just a convenient excuse for mistakes made by the company’s management has started online.
By Dorsey’s admission, from 2019 to 2024, Block’s efficiency remained flat at approximately $500,000 in gross profit per person. With the new, leaner structure, Dorsey is now targeting over $2 million in gross profit per person, representing a 4x increase in efficiency, with internal intelligence tools like Goose.
Dorsey went on to say that he believes most companies are late to realize what he has, but he predicts that the majority of tech firms will make similar structural changes within the next year.
For those leaving Block, the company is offering 20 weeks of salary plus one extra week for every year of service. Employees will also receive equity vesting through the end of May, six months of health care, and $5,000 to assist with the transition.
Dorsey stated he wanted the process to feel “awkward and human” rather than “efficient and cold.” He’s keeping communication channels like Slack open until Thursday evening so colleagues can say goodbye.
How is Block’s financial health?
Cryptopolitan recently reported that Block’s stock soared because it beat gross profit guidance and reported a high operating income of $485 million.
Cash App has monthly transacting active users reaching 59 million. Primary banking stats grew 22% year-over-year to 9.3 million. Square’s gross payment volume (GPV) in international markets grew 24% year-over-year. It successfully scaled its lending products, such as Cash App Borrow, which helped drive a 33% surge in Cash App’s gross profit.
Block recently shipped its first Proto Bitcoin mining units, which are modular ASIC miners designed to be more energy-efficient and longer-lasting than traditional hardware.
Block has raised its guidance for the full year of 2026 to $12.20 billion in gross profit, up 18% from the previous year. Its adjusted operating income is projected to hit $3.20 billion, representing a 26% margin. Block also continues to return value to shareholders through buybacks, having purchased 11.9 million shares for $790 million in the recent quarter.
Amazon, like Block, recently cut 16,000 corporate roles to integrate AI agents, and Meta eliminated over 1,000 positions in its AI division to slim down operations. So far in 2026, tech companies have announced over 30,000 job cuts worldwide.
Source: https://www.cryptopolitan.com/block-dorsey-admits-covid-bloat-in-layoffs/
