Block's chief executive Jack Dorsey announced a plan to cut the company's workforce by 40 percent, reducing staff from more than 10,000 to fewer than 6,000.
He wrote that the business is strong and that block is not making the cuts because it is in trouble.
In a letter to shareholders Dorsey said intelligence tools have changed what it means to build and run a company and that a significantly smaller team using those tools can do more and do it better.
Dorsey wrote that laid off employees will receive 20 weeks of base pay plus an additional week for each year of tenure, continued equity vesting through the end of May, six months of health coverage, company devices to keep, and a $5,000 payment.
Shares reacted positively and climbed more than 20 percent in after hours trading.
Market Reaction And Wider Debate
Dorsey signaled he expects other firms to make similar structural changes and said he preferred to act now rather than reduce staff piecemeal or be forced into cuts reactively.
Some observers questioned the rationale. Wharton associate professor Ethan Mollick noted on LinkedIn that given how new effective AI tools are, it is hard to imagine a sudden firm wide 50 percent plus efficiency gain.
Data from Challenger, Gray & Christmas shows AI was cited as a factor in seven percent of job cuts in January, which suggests the technology has not been the dominant driver of recent layoffs.
The move also touched broader debate about white collar jobs. Jessica Verrilli wrote on X that the change could ripple across public companies, and Michael Blank of Stanford Business School told Business Insider that CEOs may rush to signal they are well positioned to adopt changing AI technologies.
Reports noted Block nearly doubled headcount between late 2020 and 2025 and that the company’s share price had fallen sharply over five years. Other firms have cut workforces by large amounts, and Klarna's CEO Sebastian Siemiatkowski said natural attrition can shrink headcount substantially without formal layoffs.
