Block, the parent company of payment services Square and Cash App, announced on Thursday that it will lay off approximately 40% of its workforce, a move attributed to advancements in artificial intelligence. CEO Jack Dorsey emphasized that the decision was not a reflection of financial distress but rather a strategic maneuver to leverage AI capabilities. In a letter shared on the platform X, Dorsey stated, “We’re already seeing 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.”
The layoffs will reduce Block’s workforce from over 10,000 employees to just under 6,000, affecting more than 4,000 employees. Dorsey noted that he opted for a decisive approach to cut jobs rather than a gradual reduction, claiming, “I chose the latter,” and he plans to hold a live video call to thank the affected employees. Following the announcement, Block’s shares saw a five percent increase, rising to $54.53 US, and subsequently climbed to nearly $69 US in after-hours trading. The company also reported a 24% increase in gross profit for the fourth quarter compared to the previous year.
Founded in 2009 and headquartered in San Francisco, Block operates across the United States, Canada, parts of Europe, Australia, and Japan. However, the company did not disclose how many Canadian employees were impacted by the layoffs when approached for comment by CBC News. These job cuts are the latest in a series of reductions across major tech firms; Salesforce, for instance, recently announced plans to cut nearly half of its workforce, with CEO Mark Benioff citing the need for “less heads” as a result of AI efficiencies. Amazon also slashed 30,000 jobs, and Pinterest eliminated around 15% of its workforce, influenced by a similar focus on reallocating resources toward AI initiatives.
Some industry experts express skepticism regarding the extent to which AI is responsible for these layoffs. Many tech companies expanded their workforces significantly during the pandemic; Block’s employee count surged from approximately 3,800 in 2019 to over 10,000 by 2025. Analysts suggest that overhiring may play a substantial role in the current cuts. Matt Britzman, an analyst at Hargreaves Lansdown, pointed out that the layoffs at Block appear to stem from a blend of AI efficiency gains and a necessary reduction of corporate bloat. Dorsey acknowledged that the company did, in fact, overhire during the pandemic, but claimed that adjustments had already been made in 2024.
Tom Davenport, a professor of IT at Babson College, noted that while companies are anticipating AI’s impact on the workplace, their current uses may not align with these expectations. In a survey of over 1,000 executives conducted in late 2025, Davenport found that only 2% of organizations had made cuts directly related to AI implementations. Instead, many organizations are making reductions based on the projected benefits of AI rather than its actual capabilities.
Despite the wave of layoffs in the tech sector, Nathan Wawruck, a tech recruitment consultant at Robert Half, maintains that opportunities still exist for job seekers. He noted that while major firms may not be hiring aggressively, medium-sized companies across various industries continue to seek talent to manage technological operations, including new AI tools. Wawruck stated, “If you take all of those companies and you add them up … there’s actually quite a bit of new activity and new positions being created.” He acknowledged the difficulties faced by recent graduates with tech degrees but expressed optimism that as technology becomes more integrated into diverse industries, job availability will increase.
The situation at Block underscores the complex interplay between AI advancements and workforce management. As companies grapple with the repercussions of rapid technological evolution, the implications for employment in the tech sector remain significant. Dorsey’s announcement raises questions about the long-term impact of AI on job structures and organizational dynamics within the industry.
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