Word on Wall Street panel discusses market selloff, tech stock rotation and Nvidia’s post-earnings drop on Mornings with Maria.
Block on Thursday announced that it will cut nearly half of its workforce as the payments firm works to embed artificial intelligence (AI) throughout its operations.
The layoffs will affect over 4,000 jobs at the company and CEO Jack Dorsey indicated he moved forward with a single round of large cuts rather than a series of smaller workforce reductions to give the company more room for growth as it adapts to the AI era.
Dorsey explained the decision in a series of posts on X, the social media platform he previously led when it was known as Twitter, saying that he isn’t making the decision because Block is in trouble but because the smaller workforce “gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures.”
He said in his note that the job cuts are “one of the hardest decisions in the history of our company: we’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation.”
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Jack Dorsey said the layoffs will give Block a better route to growth. (Marco Bello/AFP via Getty Images)
Block will offer affected workers 20 weeks of salary as well as one week per year of tenure, equity vested through the end of May, six months of healthcare, corporate devices and $5,000 to put toward whatever they need to aid in their transition, Dorsey said.
Dorsey said 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.”
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XYZ | BLOCK INC. | 62.37 | +7.77 | +14.23% |
He went on to say that Block will be built with “intelligence at the core of everything we do. how we work, how we create, how we serve our customers.”
Dorsey added in a follow-up post that the company “over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024. but this misses all the complexity we took on through lending, banking, and BNPL.”
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Dorsey said he made a mistake in how he had different structures for Square and Cash App within Block. (Matt Crossick/PA Images via Getty Images)
Block shares surged following the announcement that nearly half of the company’s workforce will be laid off amid the company’s AI realignment, rising 17% during Friday morning trading.
The company’s stock is up 22% in the last week, though it’s down over 2% year to date.
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