Block, the company behind Square, Cash App and Afterpay, is cutting about 40% of its workforce. That means more than 4,000 people will lose their jobs, bringing the total number of employees down from over 10,000 to just under 6,000. The reason, according to co-founder and CEO Jack Dorsey, is the rise “intelligence tools.” In a letter to shareholders and employees, Dorsey made it clear that artificial intelligence is changing how the company works, and how many people it needs.

But as shocked as people are by the layoffs, the most intriguing part is that just hours after the news, Block’s shares jumped as much as 24%. The decision is currently one of the biggest job cuts in the company’s history.

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Block Layoffs come with earnings report

The layoffs were announced together with Block’s fourth-quarter earnings results. The company reported adjusted earnings of 65 cents per share on revenue of $6.25 billion. Analysts had expected 65 cents per share and $6.24 billion in revenue, according to LSEG.

Block’s gross profit rose 24% compared to last year, reaching $2.87 billion. Looking ahead to the full year, the company expects adjusted earnings per share of $3.66. Analysts had predicted $3.22 per share.

According to CNBC, reducing the workforce will cost the company between $450 million and $500 million. According to a securities filing, most of this amount will go toward severance payments, employee benefits and non-cash expenses related to share vesting. Block said it expects most of these restructuring costs to be recorded in the first quarter.

Block to cut Over 4,000 jobs, shares soar 24%

In a letter to shareholders, Jack Dorsey, Block’s co-founder and CEO, said, “Today we shared a difficult decision with our team,” he wrote. “We’re reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation.” According to the company’s annual filing, Block had 10,205 employees worldwide as of December 31, 2025.

For those affected, Dorsey said, “First off, if you’re one of the people affected, you’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of May, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the US you’ll receive similar support but exact details are going to vary based on local requirements). i want you to know that before anything else.”

He added that communication channels like Slack and email would stay open through Thursday evening (Pacific time) so people could say goodbye properly. “We’re not going to just disappear people from slack and email and pretend they were never here,” he wrote. “i’d rather it feel awkward and human than efficient and cold.”

Why is Block cutting jobs

Block’s Chief Financial Officer, Amrita Ahuja, said the layoffs are meant to prepare the company for its next stage of growth. She wrote that the job cuts will position the company “for our next phase of long term growth.”

“We are choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work,” Ahuja said.

In a long note, Dorsey explained, “we’re not making this decision because we’re in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”

Dorsey: More companies will follow

Dorsey also shared his view that other companies will likely make similar changes as AI tools become more common.

“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” he said. “I’d rather get there honestly and on our own terms than be forced into it reactively.”

In a post on X, Dorsey explained that he had two choices: lay off employees slowly over several months or years “as this shift plays out,” or “act on it now.” “I chose the latter,” he wrote. “Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead.”

Other tech companies also cutting jobs

Block is not alone. Other companies such as Pinterest, CrowdStrike, and Chegg have also announced layoffs recently. These companies have directly linked their job cuts to artificial intelligence changing how they work.

Meanwhile, eBay is laying off about 800 roles, or 6% of its workforce. Google has launched Nano Banana 2, a new version of its AI image generator. And Nvidia has been in the spotlight, with CEO Jensen Huang saying markets “got it wrong” about AI being a threat to software companies.

Internet reacts

The internet seemed more amused than shocked. Many users pointed out that thousands of people losing their jobs while the stock jumps 24% says a lot about where corporate priorities stand. Others warned that this could be the beginning of a much larger wave of AI-led layoffs across the tech industry.

One user wrote, “Whaaaaaaaaaaaat!??? And the stock price is up +25% with this news. The markets are now celebrating layoffs as a positive sign, as if human employees are liabilities for companies.” Another added, “AI makes everyone so efficient you can cut 40% of the staff without problems.” A third added, “Very classy note, and probably a needed choice. Great leaders make tough decisions. Wishing you the best, and sorry to the 4K getting bad news today.” One more added, “Brutally honest and human. The 20 weeks severance + $5k + keeping devices is classy. Still heartbreaking, but this is how you treat people on the way out.”