Block Fires 4,000 Workers, Stock Jumps 22% as Dorsey Cites AI Shift

TLDR:

• Block is cutting headcount from 10,000 to under 6,000, the largest AI-linked layoff in corporate history.
• 2026 profit guidance rose 54%, with EPS of $3.66 crushing the analyst estimate of $3.22.
• Goose, Block’s internal AI platform, helped engineers ship 40% more code per person in six months.
• Dorsey warned most companies will face the same workforce reckoning within a year on their own.

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Jack Dorsey has made the most aggressive AI-driven workforce decision in corporate history. Block, the fintech company behind Cash App, Square, and Afterpay, is cutting its headcount from over 10,000 to just under 6,000. 

More than 4,000 employees received departure notices in a single day. The company’s stock jumped 22%.

Dorsey Says AI Tools, Not Financial Trouble, Drove the Decision

Block is not in distress. Gross profit continues growing, and the company projects a 54% jump in 2026 profits. 

Earnings per share guidance came in at $3.66, well above analyst expectations of $3.22. Dorsey made the scope of the decision clear in a direct note to staff.

He acknowledged having two options. Cut gradually over time, or act decisively and immediately. He chose the latter, citing the damage that repeated layoff rounds cause to morale and trust. 

Departing employees will receive 20 weeks of base salary plus one additional week per year of tenure.

They also receive equity vested through end of May, six months of healthcare, corporate devices, and a $5,000 transition allowance. 

Dorsey said communication channels would remain open through Thursday evening Pacific time so staff could say proper goodbyes. He also hosted a live video session to address the company directly.

Dorsey wrote that he would rather take one hard, clear action than manage a slow reduction toward the same outcome.

Block’s Internal AI Platform “Goose” Is Central to the Shift

Block’s internal AI platform, called Goose, started as a small engineering test tool roughly two years ago. It has since expanded across nearly every department. 

Engineers are now shipping approximately 40% more code per person than they were just six months ago.

That productivity figure is what made the headcount reduction mathematically viable. Every remaining employee was already required to use AI tools daily before this announcement. AI fluency was embedded into performance reviews. Dorsey framed this not as a one-company story.

He stated that most companies will reach the same conclusion within a year. He said he would rather get there on his own terms than be forced into it reactively. 

Days before the announcement, research firm Citrini published a fictional scenario describing AI-forced mass layoffs rattling U.S. markets. Block then made a version of it real.

Wall Street’s 22% single-session surge sent a signal every corporate board can read without translation.

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