Block Inc slashes 40% of its staff as Jack Dorsey pushes ‘smaller, flatter’ AI strategy

Jack Dorsey announced that Block Inc. (XYZ) is cutting nearly 4,000 jobs as AI and "intelligence tools" are fundamentally changing how the company operates.

Dorsey says the fintech and digital payments company is financially strong and gross profit continues to grow, but is restructuring to become "smaller", "flatter" and AI-first. Earlier this month, Bloomberg reported the company was looking to cut up to 10% of its workforce.

"A decision at this scale carries risk, but so does standing still," Dorsrey wrote Thursday in a post on X. "We've done a full review to determine the roles and people we require to reliably grow the business from here, and we've pressure-tested those decisions from multiple angles. I accept that we may have gotten some of them wrong, and we've built in flexibility to account for that, and do the right thing for our customers."

After closing the trading session at $54.53 per share, Block's stock surged more than 20% in after-hours trading. Shares are down about 16% over the past year, giving the company a $31 billion market cap.

Rather than doing gradual layoffs over time, Dorsey chose one large, immediate reduction to avoid prolonged uncertainty and morale damage. Affected employees will receive 20 weeks' pay plus one week per year of tenure.

Thursday's cuts come about one year after the company laid off more than 900 employees.

"To those of you leaving…I’m grateful for you, and I’m sorry to put you through this. You built what this company is today," Dorsey continued. "To those staying…I made this decision, and I'll own it. What I'm asking of you is to build with me."

In its third-quarter earnings report released in November, Block said it earned nearly $2 billion in bitcoin revenue, which accounted for nearly a third of the company's total revenue.