Block cuts 4,000 jobs, slashes half its workforce in bold AI‑first overhaul

Block’s restructuring will bring its headcount down to just under 6,000 employees, a cut of roughly 4,000 jobs, according to a Morningstar report that quoted CEO Jack Dorsey’s shareholder letter. The fintech conglomerate, which owns Square and Cash App, framed the move as a “deliberate and bold” shift to an AI‑first operating model, saying that “intelligence tools have changed what it means to build and run a company.” Dorsey added that a smaller team equipped with the company’s own AI tools can “do more and do it better,” a sentiment echoed by CFO Amrita Ahuja, who said the firm has already seen “sizable productivity gains” across both engineering and broader functions (Morningstar).

The layoffs come on the heels of Block’s fourth‑quarter earnings release, which showed earnings per share of $0.65—down from $0.71 a year earlier but a penny ahead of FactSet consensus. The company reported $1.71 billion in operating income for the 2025 fiscal year, a figure that Ahuja described as exceeding expectations and underpinning the “position of strength” from which the cuts are being made (Morningstar). Block’s stock rose about 4 % in after‑hours trading following the announcement, suggesting investor confidence that the AI‑driven efficiency gains will offset the reduced headcount (Morningstar).

Internally, Block has been developing an AI agent codenamed “Goose,” designed to interface with large language models and automate routine tasks. The company’s shareholder letter highlighted that “intelligence tool capabilities are compounding faster every week,” and that AI will become “the core of how the entire company works”—from decision‑making and risk management to product development and customer service (Engadget). Dorsey warned that other firms are likely to follow Block’s example within a year, predicting “similar structural changes” across the industry as AI tools become more pervasive (Morningstar).

While the cuts are the most dramatic since a rumored 1,000‑person reduction in 2024‑25, Block’s leadership argues the move is proactive rather than reactive. “I’d rather get there honestly and on our own terms than be forced into it reactively,” Dorsey wrote, emphasizing a strategic choice to reshape the organization before market pressures dictate a forced downsizing (Morningstar). Analysts note that the company’s ability to sustain growth will now hinge on how quickly its AI initiatives, including the Goose agent, can replace the functions of the displaced workforce and deliver measurable cost savings.

The broader fintech sector is watching Block’s gamble closely. Competitors such as PayPal and Stripe have hinted at AI pilots, but none have announced a workforce reduction of this magnitude. If Block’s AI‑first overhaul delivers the promised productivity boost, it could set a new benchmark for lean, technology‑driven operations in financial services. Conversely, failure to translate AI capabilities into real‑world efficiency could expose the firm to operational risk and erode the confidence that buoyed its stock after the announcement. The next quarter’s results will likely serve as the first litmus test for the success of this bold, AI‑centric strategy.