Block, the company co-founded by Twitter’s Jack Dorsey, announced on Thursday that it will lay off over 4,000 employees, nearly half of its workforce, in a move driven by the rapid adoption of artificial intelligence tools.
Dorsey emphasized that the decision is not due to business 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,” he said. “Intelligence tools paired with smaller, 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.”
Jack Dorsey Explains Why Block Chose One-Time AI Layoffs
He described the decision as one of the hardest in the company’s history, but said the company opted for a single deep round of layoffs rather than multiple smaller reductions over time. “Repeated rounds of cuts are destructive to morale, focus, and the trust that customers and shareholders place in our ability to lead. I’d rather take a hard, clear action now and build from a position we believe in,” Dorsey added.
Also read : Why ‘El Mencho’ Became Mexico’s Most Feared Drug Lord
Employees affected by the layoffs will receive 20 weeks of salary, plus an additional week per year of tenure. They will also get six months of health care coverage, corporate devices, and $5,000 to assist with the transition.
Block, originally founded as Square in 2009, rebranded in 2021 to reflect its broader focus on blockchain technology. The company anticipates incurring $450 million to $500 million in restructuring charges due to the layoffs.
Despite the workforce reduction, Block reported strong financial results, posting an adjusted profit of 65 cents per share for the three months ended December 31, up from 47 cents a year earlier.