Block Cuts 40% of Workforce; Shares Rise After AI-Driven Restructuring | News

Block Inc. announced a reduction of approximately 40% of its global staff in a single round of layoffs linked to an artificial intelligence pivot; shares surged more than 20% on the news.

Block Inc., the U.S.-based financial technology company known for Square, Cash App and Afterpay, is cutting roughly 4,000 jobs, shrinking its workforce from more than 10,000 employees to just under 6,000 as it reorganizes around artificial intelligence tools and smaller, “intelligence-native” teams.

The announcement, made by co-founder and Chief Executive Officer Jack Dorsey in a shareholder and employee letter on February 26, 2026, framed the layoffs as a strategic shift rather than a response to financial distress. Dorsey wrote that advances in AI and internal intelligence tools have transformed how work is done, enabling a leaner structure that can operate effectively with fewer personnel.

Block’s decision follows prior workforce reductions in recent years but represents one of the largest percentage cuts in its history. The company elected a single, large workforce reset to minimize prolonged uncertainty and morale issues associated with staged layoffs, according to internal communications shared publicly by Dorsey.

Compensation packages for affected employees include 20 weeks of base pay, an additional week per year of tenure, equity vesting through the end of May, six months of healthcare coverage, retention of corporate devices, and transition support payments; terms outside the United States will vary according to local laws.

Shares of Block’s stock rose sharply in reaction to the announcement, gaining between about 22% and 25% in after-hours trading, reflecting investor optimism about the company’s re-centering around AI and reported financial performance.

Block reported solid financial results for the quarter ended December 31, 2025, with adjusted earnings per share of 65 cents on revenue of $6.25 billion and gross profit rising 24% year-over-year. Management also provided guidance for 2026 earnings that exceeded market expectations. 

The restructuring is expected to incur approximately $450 million to $500 million in charges, primarily associated with severance, benefits and equity vesting expenses. Block’s leadership characterized the cuts as a repositioning for efficiency and agility given the evolving technological landscape.

Dorsey’s letter highlighted the company’s belief that a smaller, more focused organization leveraging AI tools can deliver greater productivity and operational clarity. The shift to an AI-centric model aligns with Block’s long-term strategic priorities, the CEO said, and may serve as an example for other firms adapting to similar technological forces.

Block effectuated these workforce changes amid broader industry trends of major employers adjusting staffing in response to automation and AI integration, but the explicit linkage to internal AI capabilities sets this action apart from previous cuts in the tech sector.