Block axes 4,000 jobs as Dorsey bets big on AI automation

Block, the financial services company founded by Twitter co-founder Jack Dorsey, has announced it will lay off approximately 4,000 employees—40% of its workforce—citing the implementation of new "intelligence tools" that can perform tasks "better" than humans.

The mass layoffs were revealed in the company's Q4 earnings report, which showed Block generated $6.25 billion in quarterly revenue and $24.2 billion for the full year of 2025. Despite these strong financial results, Dorsey argued that AI has fundamentally changed how the company operates.

"Intelligence tools have changed what it means to build and run a company," Dorsey wrote in the shareholder letter. "We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week."

Dorsey justified the dramatic decision by arguing that gradual cuts over months or years would be "destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead." Instead, he opted for a single, decisive action.

"I'd rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome," he explained. "A smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures."

The market responded positively to the news, with Block's share price jumping approximately 23% in after-hours trading. This surge came despite the company's stock having declined roughly 80% from its 2021 peak under Dorsey's leadership.

Dorsey acknowledged the human cost of the decision, promising to host "a live video session to thank everyone," including those losing their jobs. "I know doing it this way might feel awkward," he wrote. "I'd rather it feel awkward and human than efficient and cold."

Looking ahead, Dorsey believes Block won't be alone in making such structural changes. "I don't think we're early to this realization," he wrote. "I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively."

The layoffs highlight the growing tension between AI-driven efficiency gains and workforce stability, raising questions about how other companies might follow Block's lead in restructuring around automation technologies.