WASHINGTON (dpa-AFX) - Block Inc. (formerly Square), the parent company of Cash App and Afterpay, has announced significant layoffs, reducing its workforce by 40% to just under 6,000 employees. The move, led by co-founder and CEO Jack Dorsey, is driven by advancements in artificial intelligence (AI) rather than financial weakness.
According to Dorsey, a 'significantly smaller team, using the tools we're building, can do more and do it better.' CFO Amrita Ahuja echoed this sentiment, stating that the company can 'move faster with smaller, highly talented teams using AI to automate more work.'
The job cuts come after Block's headcount grew sharply during the pandemic, from around 3,800 employees in 2019 to over 10,000 before the layoffs.
Dorsey argues that many tech firms, including Block, overexpanded during the COVID-era demand surge and are now recalibrating their operations, explicitly focusing on AI productivity gains. He predicts that most companies will reach the same conclusion and make similar structural changes within the next year.
Investors responded positively to the announcement, with Block's shares surging as much as 24%. The move fits into a broader tech-sector pattern, as companies like Amazon, Meta Platforms, and Microsoft have all trimmed staff while simultaneously investing heavily in AI infrastructure and tools.
Laid-off Block employees will receive at least 20 weeks of severance (more depending on tenure), equity vesting through the end of May, six months of healthcare, $5,000 in cash, and their corporate devices.
Dorsey views this as a structural shift, rather than just a cost-cutting cycle. He believes that the adoption of AI tools will enable smaller teams, faster execution, and lower overhead, potentially leading to a permanent workforce compression, particularly in white-collar and tech roles.
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