In one of the most aggressive workforce reductions in the fintech sector this year, Block said it will eliminate more than 4,000 roles — nearly 40% of its global staff — as part of a structural reset aimed at embedding artificial intelligence deeper into its operations.
The announcement, made alongside fourth-quarter earnings, sent the company’s stock up more than 24% in extended trading, reflecting investor approval of a strategy that pairs margin expansion with technological automation.
Chief Executive Jack Dorsey described the decision as deliberate and forward-looking rather than reactive.
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“Today we shared a difficult decision with our team,” Dorsey wrote in a letter to shareholders. “We’re reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation.”
As of Dec. 31, 2025, Block employed 10,205 people worldwide, according to its annual filing.
AI as Operating Model, Not Just Tool
Block Chief Financial Officer Amrita Ahuja said the job cuts are intended to position the company “for our next phase of long term growth,” adding that the company is “choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work.”
The framing underscores a broader recalibration underway across corporate America: artificial intelligence is no longer confined to product innovation but is reshaping organizational design. Rather than trimming around the edges, Block is resizing its workforce to align with what Dorsey called “intelligence tools” that can absorb functions previously handled by human teams.
In a post on X, Dorsey said he weighed the option of spreading layoffs over time but rejected that path.
“Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” he wrote.
He went further in his shareholder letter, predicting that the shift will not be isolated. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” Dorsey said.
Several technology firms have recently attributed job reductions directly to AI-driven efficiency gains, including Pinterest, CrowdStrike, and Chegg. Block’s move stands out for its scale and the explicit linkage between automation and headcount compression.
The restructuring comes as Block’s core business shows resilience. The company reported adjusted earnings per share of 65 cents on revenue of $6.25 billion for the fourth quarter, essentially matching analysts’ expectations for earnings and slightly surpassing revenue estimates, according to LSEG. Gross profit climbed 24% year over year to $2.87 billion.
For the full year, Block projected adjusted earnings per share of $3.66, well above the $3.22 analysts had anticipated.
The scale of the workforce reduction is particularly notable given the earnings backdrop. Rather than responding to declining revenue, Block is compressing costs during a period of gross profit growth. That approach suggests management is prioritizing operating leverage and long-term margin expansion over short-term stability in headcount.
The company expects to record $450 million to $500 million in restructuring charges, primarily tied to severance, benefits, and non-cash share-vesting expenses. Most of those charges will be incurred in the first quarter.
For investors, the calculus is straightforward: if AI-driven automation allows Block to sustain revenue growth with materially lower operating expenses, margins could widen significantly. At the same time, the cuts raise questions about execution risk. Rapid downsizing can strain product development cycles, compliance operations, and customer support — areas central to a payments platform handling billions of dollars in transactions.
Block has spent years evolving from a payments processor into a broader financial services ecosystem spanning merchant tools, consumer finance, and digital assets. A leaner organizational structure may sharpen that focus, but it also represents a decisive bet that AI systems can shoulder a meaningful share of internal workflows without undermining service quality or innovation speed.
The market’s immediate reaction signals confidence in that bet. But analysts believe the gains proving durable will depend on how effectively Block translates workforce compression into sustained margin expansion while maintaining growth momentum.