Block layoffs nearly 40% of its workforce amid AI automation

Block has slashed more than 4,000 jobs, close to 40 per cent of its workforce, in one of the most jarring restructurings seen in the fintech sector. The move, announced by chief executive Jack Dorsey, reduces headcount from over 10,000 employees to under 6,000 and signals a decisive shift towards smaller, AI-powered teams.

The reason? The CEO made clear that Block is not a loss making company, in fact it is doing very well. But, with AI tools are changing the way the company used to work.

This comes just a few weeks after Block announced 10 per cent layoffs earlier this month.

Block cuts 4,000 jobs and here are the reasons

In a detailed internal note, Dorsey described the layoffs as one of the hardest decisions in the company’s history. More than 4,000 roles are being eliminated or placed into consultation, representing nearly half of the organisation.

The chief executive was explicit that the cuts were not driven by collapsing revenues or operational distress. He stated that gross profit continues to grow, customer numbers are rising and profitability is improving. The rationale, instead, centres on structural change.

Taking to X (formerly Twitter) Dorsey said that the intelligence tools the company is building and deploying internally, alongside flatter, leaner teams, are fundamentally altering how businesses operate. AI systems are accelerating workflows and reducing the need for layers of management and duplicated functions.

“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, and that’s accelerating rapidly,” he posted.

In his view, acting decisively now is preferable to a drawn-out series of smaller redundancies that would erode morale and prolong uncertainty.

Employees affected by the cuts were offered 20 weeks of salary plus an additional week per year of service, equity vesting through the end of May, six months of healthcare coverage, continued access to corporate devices, and a $5,000 transition payment. International packages will vary according to local regulations. Communication channels were to remain open temporarily to allow staff to say their farewells, an acknowledgement of the human weight behind the numbers.

The reductions span the company’s ecosystem, which includes merchant payments platform Square and consumer finance app Cash App. While specific departmental impacts have not been disclosed, the restructuring appears broad rather than isolated.

Market cheer as thousands left

Wall Street’s reaction was swift and emphatic. Block’s share price surged 24 per cent following the announcement, adding billions to its valuation in a single trading session.

The rally reflects a wider recalibration in how technology companies are assessed. The era of “growth at any cost” has faded. Investors are now rewarding operational discipline, margin expansion and clear paths to sustainable profitability. A dramatic reduction in payroll, typically a company’s largest expense, signals immediate cost savings and improved efficiency metrics.

In that context, the market appears to interpret the move not as retrenchment, but as strategic sharpening. By shrinking its workforce so significantly in one step, Block has avoided the uncertainty of rolling redundancies and signalled a willingness to adapt quickly to technological change.

Yet the optics are troubling. The juxtaposition of soaring shares and mass redundancies reinforces concerns that financial markets increasingly prize lean balance sheets over employment stability.

AI vs human jobs

Block’s decision unfolds against mounting evidence that artificial intelligence is reshaping the labour market. Research from OpenAI identified 44 occupations at heightened risk of automation, with AI systems matching or outperforming humans in nearly half of tested scenarios across major US industries. Clerical roles, editors, sales managers and software developers were among those exposed.

OpenAI chief executive Sam Altman has argued that much existing customer support work could already be handled more effectively by AI, and that as much as 40 per cent of jobs may eventually face automation.

A separate study by Microsoft, analysing hundreds of thousands of interactions with its Copilot assistant, found high exposure among interpreters, translators, writers and customer service representatives, precisely the kinds of desk-based roles that dominate technology firms.

In that light, Block’s cuts may represent more than corporate restructuring. They may be an early example of workforce planning built around AI capacity rather than human expansion.

If smaller teams equipped with advanced tools can deliver equal or greater output, the traditional link between revenue growth and headcount growth weakens. Companies can scale without hiring, or, as this week demonstrates, even while shrinking.

For thousands of departing employees, that shift offers little reassurance. For the wider fintech industry, however, the message is unmistakable: artificial intelligence is no longer just assisting the workforce. It is redefining it.