Block Inc., Led by Jack Dorsey, Announces Sweeping 40% Workforce Reduction in AI-First Restructuring

Fintech powerhouse Block Inc. (NYSE: XYZ), helmed by Twitter co-founder Jack Dorsey, made a significant announcement on Thursday: a drastic reduction of its workforce by nearly 4,000 employees, representing approximately 40% of its total staff. This bold move is aimed at streamlining operations and adapting to the demands of the artificial intelligence (AI) era.

Market Responds Positively to Decisive Action

While the sheer scale of Block’s layoffs sent ripples through the industry, the capital market has clearly embraced Jack Dorsey’s decisive leadership and strategic pivot. Following the announcement, Block’s stock price surged by over 20% in after-hours trading on Thursday, successfully reversing a year-long trend of underperformance that saw its shares decline by approximately 16%. The company’s market capitalization currently stands at around $31 billion.

A Bold Vision for the AI Era: Leaner, Flatter, AI-First

Jack Dorsey emphasized that despite Block’s current robust financial health and sustained gross profit growth, a substantial restructuring and downsizing are imperative to usher in the company’s next phase of growth. The objective is to forge an organization that is “leaner, flatter,” with an unwavering commitment to an “AI-first” strategic core.

Taking to social media platform X on Thursday, Dorsey articulated his philosophy: “Such large-scale decisions inherently carry risks, but standing still is no less risky.”

He further elaborated that the company has meticulously reviewed the roles and talent required for future growth, validating these decisions through multiple perspectives. Dorsey candidly acknowledged that such judgments might not be 100% accurate, thus building in flexibility within the system to ensure that customer interests remain paramount.

One-Time Restructuring to Minimize Uncertainty

In contrast to the phased, incremental layoff approaches adopted by many other Silicon Valley firms, Jack Dorsey opted for a dramatic, “one-and-done” reduction. This strategy aims to preempt prolonged uncertainty that could erode morale and foster disengagement among employees. Block has also demonstrated a commitment to supporting its departing staff with a comprehensive financial compensation package: affected employees will receive a minimum of 20 weeks of base salary, with an additional week’s pay for each full year of service.

This marks Block’s second major workforce reduction, following an earlier round last year that impacted over 900 employees.

Dorsey’s Message to Employees

In a heartfelt statement, Jack Dorsey addressed his workforce: “To those of you who are leaving, I am grateful, and I am sorry you are going through this. You built this company into what it is today. To those who are staying… this is my decision, and I will take responsibility. I hope you will walk with me.”

Financial Context: Bitcoin Revenue Contribution

According to Block’s Q3 financial report, released last November, Bitcoin-related revenue amounted to nearly $2 billion, accounting for approximately one-third of the company’s total revenue.