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Tag: Block layoffs

  • Canadian Stocks Slide as Tech Weakness and GDP Miss Weigh on Markets

    Canadian Stocks Slide as Tech Weakness and GDP Miss Weigh on Markets

    Canada’s main stock index closed lower on Friday, mirroring declines in U.S. markets as weakness in technology stocks dragged broader indexes down.

    Brian Madden, chief investment officer at First Avenue Investment Counsel, said the pullback masked signs of underlying strength, pointing to gains in commodities and defensive sectors such as telecoms. He noted that despite the overall decline, there were more advancing stocks than decliners on the day.

    Technology and financial shares weighed most heavily on the S&P/TSX composite index. Madden said software stocks have been under pressure in both Canada and the United States, while financial stocks paused after a strong rally earlier this year.

    Canada’s Big Six banks reported solid earnings this week, beating expectations, but Madden said investors appeared to be taking profits after the sector’s recent run-up.

    Investors also digested new economic data from Statistics Canada showing gross domestic product contracted at an annualized rate of 0.6 per cent in the fourth quarter. The figure missed forecasts from the Bank of Canada and most economists, who had expected flat growth.

    StatCan said the contraction was largely driven by businesses drawing down inventories rather than producing new goods. Madden described the data as disappointing but said it was not as negative as the headline number suggested.

    The S&P/TSX composite index fell 161.97 points to 34,339.99.

    In New York, the Dow Jones industrial average dropped 521.28 points to 48,977.92. The S&P 500 fell 29.98 points to 6,878.88, while the Nasdaq composite lost 210.17 points to 22,668.21.

    U.S. markets were pressured as investors continued to punish companies seen as vulnerable to disruption from artificial intelligence. Software stocks and other firms perceived as potential losers in the AI transition faced renewed selling.

    Block added to market anxiety after CEO Jack Dorsey announced the company would cut nearly half of its workforce as part of an AI-driven restructuring.

    Inflation data also weighed on sentiment after a report showed wholesale inflation in the United States rose 2.9 per cent last month, far above the 1.6 per cent economists had expected.

    Oil prices surged amid escalating tensions between the United States and Iran over Tehran’s nuclear program. The April crude oil contract gained US$1.81 to settle at US$67.02 per barrel, reflecting fears that any conflict in the Middle East could disrupt global oil supplies.

    The Canadian dollar traded at 73.30 cents US compared with 73.06 cents US on Thursday.

    Gold prices also jumped as investors sought safe-haven assets, with the April gold contract rising US$53.70 to US$5,247.90 an ounce.

  • Block to Cut Over 4,000 Jobs in Major AI Overhaul as Shares Surge 25%

    Block to Cut Over 4,000 Jobs in Major AI Overhaul as Shares Surge 25%

    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.