Block Slashes Nearly Half Its Workforce in Bold AI Pivot, CEO Dorsey Predicts Industry-Wide Shift
By Staff Reporter | February 26, 2026
In a seismic move rippling through the tech sector, fintech giant Block announced Thursday it will lay off more than 4,000 employees—nearly half its workforce—as it embraces artificial intelligence to redefine workplace efficiency. The Oakland-based parent company of Square and Cash App saw its stock surge over 23% in after-hours trading following the disclosure.[1]
Block CEO and co-founder Jack Dorsey, also known for co-founding Twitter (now X), framed the cuts not as a response to financial distress but as a strategic evolution driven by AI. “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,” Dorsey posted on X.[1][2] He emphasized that this transformation is accelerating rapidly, positioning Block at the forefront of an AI-powered operational overhaul.
A Trend Accelerating Across Tech
Block’s announcement underscores a broader wave of layoffs in the technology industry, where companies are increasingly leveraging AI to streamline operations and boost productivity. The cuts represent about 40% of Block’s staff, reducing its global headcount from 10,205 full-time employees as of December, with the reductions set to conclude by the end of the second quarter of fiscal 2026.[1][2]
This is not Block’s first round of reductions. In 2025, the company eliminated 931 jobs, or 8% of its workforce, citing performance and strategic reasons—though Dorsey clarified at the time that AI was not the driver. Now, however, AI is explicitly central. Despite the layoffs, Block reported robust financial health, with gross profit exceeding $10 billion in 2025, a 17% increase year-over-year.[1]
The layoffs align with mounting evidence of AI’s disruptive force in white-collar jobs. A recent Challenger, Gray & Christmas report revealed U.S. companies announced 108,435 layoffs in January alone—a 118% jump from the previous January and the highest for any January since 2009. While not all cuts are AI-related, the pattern is clear: tech firms are reorganizing around automation.[2]
| Company | Layoffs | Date | Reason |
|---|---|---|---|
| Block | 4,000 (40-50%) | Feb 2026 | AI-driven efficiency |
| Amazon | 16,000 | Jan 2026 | Remove layers, AI push |
| <15% | Jan 2026 | Shift to AI resources | |
| Meta | Several hundred | Oct 2025 | AI division cuts |
Dorsey’s Human Touch Amid the Cuts
Dorsey sought to soften the blow with a personal approach. He announced plans for a live video address to employees and instructed that laid-off workers’ emails and Slack channels remain active until Thursday evening, allowing farewells. “I know doing it this way might feel awkward,” he wrote. “I’d rather it feel awkward and human than efficient and cold.”[1]
Block joins a roster of tech heavyweights recalibrating for the AI era. Amazon’s January cuts targeted layers of management to foster agility, while Pinterest last month trimmed less than 15% of staff to redirect resources toward AI initiatives. Meta, too, shed hundreds from its AI division in October 2025.[2] Analysts note that while AI hasn’t sparked a universal job crisis, companies like Block are openly tying reductions to AI adoption, signaling a potential tipping point.
Implications for Workers and the Economy
The fintech sector, long a beacon of innovation, now exemplifies AI’s double-edged sword: unprecedented efficiency gains paired with workforce contraction. Block’s moves could presage similar actions elsewhere, as Dorsey himself predicts most companies will follow suit. Investors appear optimistic, with the stock’s sharp rally reflecting confidence in AI-fueled profitability.
Yet for the 4,000 affected employees, the transition is stark. In a job market strained by tech turbulence, these cuts amplify anxieties. Broader economic indicators, like the surge in January layoffs, paint a picture of corporate belt-tightening amid AI’s rise. As Dorsey champions “smaller and flatter teams,” questions linger: Will AI truly create net new opportunities, or will it redefine work at the expense of mass employment?
Block’s saga highlights the accelerating fusion of technology and business models. With gross profits soaring and AI tools maturing, the company bets on a leaner future. Whether this model scales industry-wide remains to be seen, but Thursday’s announcement marks a bold chapter in tech’s AI reckoning.
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