Jack Dorsey Cuts 4,000 Jobs at Block Inc. as Square and Cash App Undergo Major Restructuring

Cutting half your staff while growing revenue signals wall Street that AI-driven efficiency now commands higher valuations than traditional headcount-based scaling.

Photo: Zach M. / Unsplash

Block Cut Half Its Staff. The Stock Went Up 24%.

On Thursday, Jack Dorsey announced that Block — the company behind Square, Cash App, and Afterpay — would cut more than 4,000 employees, taking its global workforce from over 10,000 to just under 6,000. It is one of the largest single-day workforce reductions in fintech history.

The stock surged 24% in after-hours trading. By Friday morning it was still up nearly 20% in premarket.

Dorsey’s explanation was blunt. “Intelligence tools have changed what it means to build and run a company,” he wrote in his shareholder letter. “A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week.”

He was equally direct about why he moved all at once rather than slowly: “Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome.”

This Isn’t a Struggling Company

It is worth pausing on that context, because it changes what this story means.

Block is not cutting jobs because it is in financial trouble. Full-year gross profit hit $10.36 billion in 2025, up 17% year-over-year. Q4 adjusted EPS came in at $0.65, beating estimates. The company raised its full-year guidance after the announcement.

“We’re not making this decision because we’re in trouble,” Dorsey wrote on X. “Our business is strong. Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving.”

CFO Amrita Ahuja framed it the same way: “We are choosing to shift how we operate at a time when our business is accelerating.”

That is the part that should get your attention. When companies cut jobs during a downturn, it is survival. When a company cuts nearly half its workforce during a period of growth and the stock jumps 24%, it is something else entirely — a signal that Wall Street believes AI-driven efficiency is now worth more than headcount.

Block had 3,835 employees at the end of 2019. It nearly tripled to over 10,000 during the pandemic years. It is now heading back toward 6,000 — and framing that not as a retreat, but as the next phase.

Dorsey’s Warning to Every Other CEO

The most significant line in Dorsey’s letter was not about Block. It was about everyone else.

“I don’t think we’re early to this realization. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”

That is a CEO of a major public company, on the record, telling the market that mass AI-driven restructuring is not a one-off event — it is a wave, and Block is not leading it so much as admitting it has already started.

Other companies have already moved in the same direction. Salesforce cut 4,000 customer service roles in September 2025 after AI agents took over roughly 50% of support interactions. Amazon cut 14,000 corporate roles. Microsoft cut 15,000. Pinterest, CrowdStrike, and Chegg have each directly cited AI as the driver of recent layoffs. According to one estimate, nearly 55,000 AI-attributed layoffs occurred across the tech sector in 2025.

Block’s internal AI tool is called Goose — an agentic assistant the company has been building internally. Dorsey cited Square’s dashboard as one example already in production: AI now gives sellers “real-time insights on menus, staffing, and customer behavior, with clear recommendations they can act on in seconds.”

Employees leaving the company will receive 20 weeks of salary plus one additional week per year of tenure, equity vested through the end of May, six months of healthcare, their corporate devices, and $5,000 for the transition.

What EY’s AI Leaders Said This Week

The Block news lands in the same week that two of EY’s top consulting leaders pushed back on the dominant narrative — and offered a more nuanced take on what AI actually means for the people doing the work.

Dan Diasio, EY’s global consulting AI leader, told Business Insider that knowledge workers are getting a bad rap. AI without human context, he said, produces “statistical sameness” — and at its worst, “polished slop.” The point: a language model can assemble a presentation. It cannot tell you whether the presentation is asking the right question.

Errol Gardner, global head of consulting at EY, went further on junior workers specifically. Young employees arrive without years of assumptions baked in. They are, as Diasio put it, “more of a blank sheet of paper” — which makes them more willing to challenge how things are done and rethink processes from scratch. “If anything, as a young graduate, they’ve got more opportunity to change our organization,” Gardner said.

EY has maintained its graduate hiring goals through all of this. Rival PwC has scaled back. The divergence in strategy reflects a genuine disagreement in the industry about whether AI shrinks the need for entry-level talent or reshapes it.

What both camps agree on: the “assembly” work — pulling together decks, drafting proposals, synthesizing data — is already being automated. The question is what fills the space it leaves behind.

The Honest Tension Here

There are legitimate critics of Dorsey’s move. Wharton professor Ethan Mollick noted this week that “given that effective AI tools are very new, and we have little sense of how to organize work around them, it is hard to imagine a firm-wide sudden 50%+ efficiency gain” that justifies cuts of this scale. A Forrester Research report published last month found that 55% of employers who made AI-driven layoffs already regret them — and that roughly half will quietly rehire.

There is also a pattern worth naming. Block’s stock has fallen more than 75% from its 2021 peak. The company grew its headcount aggressively during the pandemic and is now pulling it back. Whether AI is the cause or the convenient explanation is a fair question — and one Dorsey did not fully answer.

What is not in dispute: the market rewarded the announcement immediately and significantly. That reward creates an incentive structure that will outlast Block’s specific situation. When cutting half your staff during a period of growth sends your stock up 24%, other CEOs notice.

What to Watch This Week

PCE inflation data (Friday): The Fed’s preferred inflation measure drops this morning. After Wednesday’s hotter-than-expected PPI reading — core wholesale prices up 0.8%, well above the 0.3% consensus — any upside surprise in PCE will reinforce the “higher for longer” rate narrative and pressure growth stocks further.

AI layoff contagion: Watch whether any other mid-to-large tech companies announce similar restructurings in the coming days. Dorsey said he expects most companies to follow within a year. The next announcement will tell us whether this is a trickle or the start of something faster.

Block stock follow-through: After a 24% spike in after-hours trading, watch whether XYZ holds those gains through the first full trading session. Sustained buying would signal genuine conviction. A fade would suggest the move was reactive and the market needs more proof.

White-collar job market data: The March jobs report is weeks away, but weekly jobless claims drop Thursday. Any uptick in claims from the tech and finance sectors would be an early signal that AI restructuring is beginning to show up in the labor data.