Betting on AI transformation! Block cuts 40% of its workforce, stock price soars 20% after hours

Founded by Twitter co-founder Jack Dorsey, the fintech company Block Inc. (NYSE: XYZ) announced on Thursday that, in response to the AI era, it will significantly cut nearly 4,000 employees, accounting for about 40% of its total workforce.
Although this round of layoffs is shocking, the capital markets clearly support Jack Dorsey’s decisive transformation. After hours on Thursday, Block’s stock price surged over 20%, successfully reversing the weak performance of the past year, which saw a decline of approximately 16%. Currently, Block’s market capitalization is around $31 billion.
Jack Dorsey stated that while Block’s financial situation remains solid and gross profit continues to grow, to prepare for the next growth phase, the company must slim down and reorganize significantly, making the organization “more streamlined and flatter,” and establishing an “AI-first” strategic core.
On Thursday, Dorsey posted on social platform X: “Such a large-scale decision certainly carries risks, but standing still is not without its own risks.”
He emphasized that the company has thoroughly reviewed the roles and talent needed for future growth and has repeatedly validated the decision from multiple perspectives. He also admitted that the judgment may not be 100% correct, so flexibility has been built into the system to ensure that customer interests remain the core focus.
Compared to other Silicon Valley companies that adopt multiple rounds of sporadic layoffs, Dorsey chose a “one-time, comprehensive” downsizing to avoid long-term uncertainty that could lead to morale collapse and disarray. For employees affected by the layoffs, Block also demonstrated financial sincerity: those laid off will receive at least 20 weeks of base salary, with an additional week per year of service.
This is the second major wave of layoffs after last year’s reduction of over 900 employees.
In a statement, Jack Dorsey said, “To those of you leaving, I am grateful and sorry to have you go through this. You have made the company what it is today. As for those remaining… this is my decision, and I take responsibility. I hope you will continue to move forward with me.”