Block is laying off nearly half its staff, a 24% increase! CEO: AI improves efficiency; most companies will make similar adjustments in the coming year.

Authors: Bao Yilong and Long Yue , Wall Street Insights

Jack Dorsey’s fintech company Block announced layoffs of approximately 4,000 people, cutting nearly half of its workforce , citing a complete organizational restructuring driven by artificial intelligence to improve efficiency.

On Thursday, February 26, Block announced its layoff plan in a letter to shareholders. CEO Jack Dorsey admitted in the letter that employees were only informed of the layoffs that day and predicted that most companies would be forced to make similar structural adjustments within the next year. He wrote:

Subsequently, Block's Chief Financial Officer, Amrita Ahuja, stated in an interview with Bloomberg:

Since 2024, Block has been restructuring its business model and staffing due to poor stock performance. At the same time, the company has also heavily invested in artificial intelligence tools to improve operational efficiency, including developing its own tool called Goose.

Following the announcement, Block's stock price rose by more than 24% in after-hours trading.

Strong growth provides confidence for restructuring

Ahuja's so-called "foundation of strength" is supported by performance data.

In its shareholder letter, Block disclosed that its gross profit for the full year of 2025 reached $10.36 billion, a year-on-year increase of 17%, and that the gross profit growth rate more than doubled from the first quarter to the fourth quarter.

In the letter, Dorsey listed several growth highlights: user growth for its peer-to-peer payment app, Cash App, has regained momentum; the scale of its lending products continues to expand; and Square's total payment volume also maintains its accelerating trend. This strong financial performance provides the company with relatively ample buffer space to proceed with a large-scale restructuring at this time.

In his letter to shareholders, Dorsey stated that he believes most companies will reach the same conclusion and make similar structural adjustments within the next year.

This round of layoffs is a continuation of multiple rounds of rolling job reductions, with previous layoffs often linked to annual performance evaluations. This concentrated announcement escalates this process, resulting in the reduction of nearly half of the workforce in one go.

Analysts believe that the sharp jump in after-hours stock price indicates that the capital market is positively evaluating the company's strategic approach of proactively using AI to restructure efficiency, even at the cost of large-scale employee reductions.

The full text of Jack Dorsey's letter to all staff is as follows: