Jack Dorsey’s Block Cuts Nearly Half Its Workforce in Major AI Shift

Jack Dorsey’s financial technology company Block has eliminated more than 4,000 jobs — nearly half of its workforce — in what executives describe as a strategic shift toward artificial intelligence-driven operations.

The layoffs, announced Thursday, affect employees across the company, which owns Cash App, Square, and Afterpay.

Dorsey told staff the cuts were not the result of financial distress but rather a deliberate move to restructure around what he called “intelligence tools.”

What Is News

Block is cutting more than 4,000 employees, nearly half its workforce.

CEO Jack Dorsey said the move is tied to increased integration of AI-driven tools.

The company insists business performance remains strong, with growing gross profit.

Affected workers will receive severance packages, equity vesting, and health coverage.

Block’s shares surged approximately 24% following the announcement.

“Our Business Is Strong”

In a note to employees, Dorsey emphasized that the layoffs were not triggered by financial weakness.

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

Instead, he framed the cuts as a proactive restructuring to build a smaller, AI-centered organization capable of operating more efficiently.

Dorsey said reducing headcount in a single decisive move was preferable to gradual layoffs that could damage morale over time.

“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,” he wrote.

AI at the Core

Throughout the message, Dorsey described a future in which artificial intelligence becomes central to how Block operates.

“We’re going to build this company with intelligence at the core of everything we do,” he told remaining employees. “How we work, how we create, and how we serve our customers.”

The CEO acknowledged the risk involved in restructuring around AI but argued that smaller, highly capable teams using advanced tools could move faster and innovate more effectively.

The move mirrors a broader trend across the tech sector, where companies are trimming staff while expanding investments in AI infrastructure and automation.

Severance and Transition Support

Block said affected employees will receive:

20 weeks of base pay

An additional week of pay for each year of service

Equity vesting through the end of May

Six months of health coverage

A $5,000 transition payment

The ability to keep corporate devices

Employees outside the United States will receive comparable packages, adjusted for local regulations.

Dorsey also said he would hold a live video session to thank employees for their contributions.

“To those of you leaving… I’m grateful for you, and I’m sorry to put you through this,” he wrote. “This decision is not a reflection of what you contributed.”

What Is Analysis

Block’s decision reflects a growing divide in the tech industry: companies that believe AI is primarily a productivity enhancer versus those treating it as a labor-replacing force.

Dorsey’s framing suggests the latter.

Rather than positioning AI as a tool to assist large teams, Block appears to be restructuring around the assumption that smaller teams equipped with AI can perform the same — or greater — output.

Investors responded positively, with shares rising sharply after the announcement. The market reaction suggests shareholders may view aggressive cost-cutting and AI integration as signals of long-term margin expansion.

However, the move raises broader questions about employment stability in knowledge-based sectors. Block’s layoffs come amid similar reductions at other major firms, including Amazon, which recently cut thousands of corporate roles as part of its own streamlining efforts.

The timing also reinforces a wider debate: whether AI-driven efficiency gains will primarily increase corporate profitability or eventually create new categories of employment that offset job losses.

A Broader Tech Realignment

Over the past year, software companies have faced mounting pressure from investors concerned that AI tools could cannibalize traditional software revenue models.

Block’s restructuring suggests leadership believes the safest path forward is not resisting that shift but accelerating into it.

Whether the strategy results in sustainable growth — or becomes an early example of overcorrection — remains to be seen.

Bottom Line

Block’s decision to eliminate nearly half its workforce marks one of the most dramatic corporate restructurings explicitly tied to artificial intelligence.

Dorsey insists the company is not struggling — but evolving.

The message is clear: in the AI era, companies may prioritize leaner teams powered by automation over traditional workforce expansion.

For employees across the tech sector, the signal is equally clear: artificial intelligence is no longer just an efficiency tool. At some firms, it is becoming the operating model.