Block Cuts Nearly Half Its Workforce as AI Reshapes Company Structure

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Block, the fintech company formerly known as Square, is cutting approximately 4,000 jobs—nearly half its workforce—as CEO Jack Dorsey announces a fundamental shift in how the company operates with AI at its core.

The decision, described by Dorsey as "one of the hardest decisions in the history of our company," reduces Block's headcount from over 10,000 employees to just under 6,000. The cuts affect employees across multiple regions, with those impacted receiving substantial severance packages including 20 weeks of base salary plus one additional week per year of tenure, equity vesting through May 2026, six months of healthcare coverage, company devices, and $5,000 in transition support.

Dorsey's message to employees reveals a company undergoing a profound transformation. "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."

This isn't a cost-cutting measure driven by financial distress. Dorsey explicitly states that Block's business remains strong: "Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving." Instead, the cuts reflect a strategic pivot toward AI-driven operations that require fewer people to achieve the same—or greater—output.

The AI-Driven Restructuring

The decision represents a bet on artificial intelligence as a force multiplier for productivity. Dorsey frames this as a choice between gradual attrition over months or years versus "being honest about where we are and act on it now." He argues that repeated rounds of cuts would be "destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead."

This approach mirrors broader trends across the tech industry, where companies are reassessing workforce needs in light of AI capabilities. However, Block's scale—cutting nearly half its workforce in one decisive move—is particularly dramatic.

What This Means for the Future

Dorsey envisions a future where Block operates with "intelligence at the core of everything we do": how the company works, creates, and serves customers. The vision extends beyond internal operations to customer experience, with Dorsey describing a future where customers can "build their own features directly, composed of our capabilities and served through our interfaces."

This suggests Block is moving toward a more automated, self-service model where AI handles tasks previously requiring human intervention, while human employees focus on higher-level strategic work and AI oversight.

Industry Context and Implications

The move comes amid broader uncertainty in the fintech sector, where companies are grappling with changing consumer behavior, regulatory pressures, and technological disruption. Block's decision to go all-in on AI-driven restructuring—rather than pursuing a more gradual approach—signals confidence in AI's transformative potential, but also carries significant risk.

By choosing decisive action over incremental change, Dorsey is betting that being smaller and more focused will ultimately make Block more competitive. The company aims to grow "the right way, on our own terms, instead of constantly reacting to market pressures."

Human Impact and Company Culture

Notably, Dorsey emphasizes the human element of this transition. Communication channels will remain open through Thursday evening Pacific time to allow proper goodbyes, and he'll host a live video session to thank departing employees. "I'd rather it feel awkward and human than efficient and cold," he writes.

This approach attempts to balance the harsh reality of mass layoffs with dignity and respect for those affected. Dorsey acknowledges that those leaving "built what this company is today" and will be "great contributors to any organization going forward."

Looking Forward

The restructuring positions Block for a future where AI handles much of the operational heavy lifting, potentially enabling faster innovation and more agile responses to market changes. However, the success of this strategy depends on whether the remaining workforce can effectively leverage AI tools to maintain—and grow—the company's competitive position.

The coming months will reveal whether Block's bold bet on AI-driven efficiency pays off, or whether the company underestimated the value of human expertise in an increasingly automated world.