Jack Dorsey’s Block Lays Off Over 4,000 Workers in Bold AI-Driven Overhaul

In a move that has sent shockwaves across the tech and fintech industries, Block Inc.  , the company behind Square, Cash App, and Afterpay, has announced the reduction of nearly half of its workforce.

The company, via its founder Jack Dorsey, disclosed that it has laid off a significant number of more than 4,000 of its workers, shrinking from over 10,000 employees to just under 6,000.

The decision, according to Dorsey, was framed not as a response to financial distress, but as a proactive embrace of artificial intelligence and “intelligence tools” that are fundamentally reshaping how companies operate.

In a lengthy memo posted on X (formerly Twitter), he explained the rationale behind the sweeping cuts.

Part of the memo reads,

“Today we’re making one of the hardest decisions in the history of our company: we’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. That means over 4,000 of you are being asked to leave or are entering into consultation. I’ll be straight about what’s happening, why, and what it means for everyone.

“We’re not making this decision because we’re in trouble. Our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. But something has changed. 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 that fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”

Dorsey emphasized that Block’s core business remains strong, gross profit is growing, customer numbers are rising, and profitability is improving. Yet he argued that gradual, repeated layoffs over months or years would erode morale, focus, and stakeholder trust more than 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 stated.

For the affected workers, the company has structured a relatively generous severance package with 20 weeks of salary plus one additional week per year of tenure, equity vesting through the end of May, six months of continued healthcare coverage, retention of corporate devices, and $5,000 in transition support (with adjustments for non-U.S. employees based on local laws).

Following Block’s significant downsizing of its workforce, the market reacted strongly and positively. The company’s stock surged more than 24% in after-hours trading following the announcement, with some reports citing peaks near 25–31% in early reactions. Investors appear to view the move as a clear signal of cost efficiency, productivity gains through AI, and strategic agility in a rapidly evolving tech landscape.

Notably, the announcement has sparked intense debate across social media. Some see Block’s move as a forward-thinking bet on AI’s compounding capabilities, with Dorsey himself suggesting that “most companies are late to this shift.

However, critics warn of broader societal risks, noting that massive white-collar job displacement, reduced consumer spending power, and unemployment will rise broadly, which raises questions about whether AI-driven efficiency ultimately erodes the very demand companies rely on.

Block’s dramatic restructuring may prove to be a bellwether. As AI tools become more powerful and accessible, other large organizations could follow suit either gradually or, like Block, in one decisive sweep. For now, Dorsey has placed a high-stakes bet that a dramatically smaller, AI-augmented team can not only survive but thrive in the emerging future of work.

Whether this becomes a model for the industry or a cautionary tale remains to be seen, but the message from Block’s move is unmistakable. The era of AI reshaping corporate headcount has arrived, and it’s moving faster than many expected.