Block announced on Thursday that it will cut more than 4,000 jobs, nearly half of its workforce, as part of a sweeping overhaul to embed artificial intelligence across its operations, sending the company’s shares up 25% in after-hours trading.
The layoffs highlight how the artificial intelligence boom is shifting from hype to real workforce transformation, intensifying fears among workers and economists that AI could replace jobs even as it boosts productivity and profitability.
Chief Executive Officer Jack Dorsey said intelligence tools are already changing how companies are built and run. He added that much smaller teams can now achieve more using AI-powered systems and that many companies are late to this realization.
In a post on social media platform X, Dorsey said Block chose a single deep round of cuts rather than multiple smaller layoffs over time. He said the move would allow the company to grow more strategically instead of reacting constantly to market pressure.
Investors have increasingly rewarded companies that demonstrate AI-driven cost savings. Analysts described the workforce reduction as a defining moment in how technology is beginning to reshape corporate structures and operating models.
Block said it expects to record between $450 million and $500 million in restructuring charges related to the layoffs. Dorsey said he believes most companies will eventually make similar structural changes and that Block preferred to act on its own terms rather than be forced into it later.
The company’s financial performance added momentum to the announcement. Block reported adjusted earnings of 65 cents per share for the quarter ended December 31, up from 47 cents a year earlier. Gross profit rose 24% year over year, driven by a 33% surge in its Cash App business, which enables peer-to-peer mobile payments.
Block said it expects to sustain strong growth at Cash App and accelerate gross payment volume at Square over the next three years.
For the first quarter, the company forecast gross profit of $2.80 billion, representing a 22% increase from a year earlier. It also raised its 2026 gross profit growth outlook slightly to 18% from an earlier estimate of 17%, while maintaining what it called a prudent approach to its near-term and full-year forecasts.
