Jack Dorsey Announces 4,000 Job Cuts at Block as AI Push Sends Shares Soaring

In a move that has rattled employees but excited investors, Jack Dorsey has announced plans to cut around 4,000 jobs at fintech firm Block, citing a sweeping shift toward artificial intelligence-led efficiency. Within hours of the announcement, the Nasdaq-listed company's shares surged by as much as 27% in post-market trading.

The decision marks one of the most significant restructurings in the fintech sector this year and signals a deeper shift in how technology firms are redefining workforce needs in the AI era.

A Strategic Reset Driven by AI

The layoffs were first revealed in a shareholder letter and later confirmed by Dorsey on X. The company plans to cut 4,000 roles from its roughly 11,000-person workforce, making it one of the largest job cuts in Block's history.

Dorsey framed the decision as a forward-looking strategy rather than a sign of financial distress. He argued that rapid improvements in AI tools have fundamentally changed how modern companies build products and operate.

According to Dorsey, leadership faced two choices: implement gradual layoffs over several years or execute one decisive round of cuts. He chose the latter, saying repeated downsizing would harm morale and strategic clarity.

AI at the Centre of Block's Transformation

Dorsey emphasised that recent advances in artificial intelligence have dramatically improved productivity. During the post-earnings analyst call, he noted that AI models became significantly more capable in late 2025, enabling leaner teams to accomplish more.

He also acknowledged that internal redundancies existed and needed to be eliminated as automation expanded across workflows.

The broader implication, he suggested, is that many companies are underestimating how quickly AI will reshape white-collar work.

Strong Financials Back the Move

Importantly, the layoffs come despite strong financial performance. Block reported a 24% year-on-year rise in gross profit for the December quarter.

A major driver was the company's Cash App segment, which recorded 33% growth. The firm also operates Square and music streaming service Tidal, both key parts of its broader ecosystem.

The strong earnings helped counter any perception that the layoffs were driven by financial weakness, reinforcing Dorsey's argument that the restructuring is strategic rather than reactive.

Investor Confidence Surges

Markets responded swiftly. Shares jumped up to 27% in post-market trading following the announcement, signalling strong investor approval for a leaner, AI-focused organisational model.

For investors, the move suggests higher long-term efficiency and profitability. For employees, however, it underscores the accelerating pace of automation reshaping the tech industry.

Severance and Support for Employees

Dorsey confirmed that affected employees will receive:

• 20 weeks of salary plus one additional week per year of tenure
• Equity vesting through the end of May
• Six months of healthcare coverage
• Corporate devices and $5,000 in transition support

Employees outside the United States will receive comparable benefits, according to the company.

A Broader Tech Industry Signal

While Block has conducted layoffs before, this round stands out for its scale and its explicit connection to AI adoption. Dorsey positioned the decision as a necessary step to ensure the company grows on its own terms rather than reacting to external market pressures.

The move also adds weight to growing concerns that artificial intelligence could disrupt large segments of white-collar employment.