Block Slashes 40% of Workforce in Major AI-Driven Layoffs, CEO Dorsey Predicts Industry-Wide Shift
By Tech News Desk | February 26, 2026
In a seismic move rippling through the tech sector, Block, the fintech giant formerly known as Square, announced Thursday it is laying off approximately 4,000 employees—nearly 40% of its total workforce—as it pivots aggressively toward artificial intelligence (AI) integration.[1] CEO Jack Dorsey framed the cuts as a necessary step to embrace “new ways of working” powered by AI, boldly predicting that “most companies will do the same.”
Dorsey’s Vision: AI Over Headcount
Dorsey, co-founder of Twitter (now X) and a vocal AI proponent, shared the news via social media, stating, “We already seeing the intelligence we’re using, with smaller flatter are enabling new way working which what it to build run a. and that’s accelerating rapidly.”[1] While the post contained apparent typos, the message was clear: Block is streamlining operations to prioritize AI-driven efficiencies, reducing layers of management and staff to foster innovation.
The layoffs, affecting roles across engineering, product, and operations, come amid Block’s broader strategy to embed AI into its payment processing, Cash App, and Square ecosystems. Sources familiar with the matter indicate that AI tools are already automating significant portions of software development, customer support, and data analysis—tasks previously handled by human teams.
“This is not just cost-cutting; it’s a fundamental redesign of how we operate in an AI-first world.”
— Jack Dorsey, Block CEO[1]
Part of a Broader Tech Layoff Wave
Block’s decision amplifies an ongoing trend of mass layoffs in Big Tech, fueled by economic pressures, post-pandemic adjustments, and the rise of AI automation. According to outplacement firm Challenger, Gray & Christmas, U.S. companies announced 108,435 layoffs in January 2026 alone—a 118% surge from January 2025 and a 205% jump from December 2025, the highest January total since 2009.[1]
Block is not alone. On the same day, eBay revealed plans to cut 800 jobs, or 6% of its workforce, shortly after announcing a $1.2 billion acquisition of fashion resale platform Depop.[1] Amazon, meanwhile, slashed 16,000 positions last month, following 14,000 cuts just three months prior.[1] Pinterest disclosed layoffs affecting less than 15% of staff, explicitly citing a resource shift to AI initiatives.[1] Even Meta trimmed several hundred roles in its AI division back in October.[1]
| Company | Layoffs | % of Workforce | Reason Cited |
|---|---|---|---|
| Block | 4,000 | 40% | AI integration[1] |
| eBay | 800 | 6% | Restructuring[1] |
| Amazon | 16,000 | N/A | Efficiency[1] |
| <15% | <15% | AI shift[1] |
AI’s Double-Edged Sword: Efficiency vs. Job Losses
While AI promises unprecedented productivity, Block’s explicit linkage of layoffs to the technology has sparked debate. Labor economists note that AI is displacing white-collar jobs faster than anticipated, particularly in tech where tools like large language models and code generators are maturing rapidly. “Block stands out as the latest prominent organization to explicitly connect its workforce reduction to AI,” analysts observed.[1]
Employee reactions have been mixed. Former Block staffers took to LinkedIn and X, expressing shock at the scale but acknowledging the company’s AI ambitions. One anonymous engineer posted, “AI wrote half my code last quarter. It’s coming for all of us.” Unions and advocacy groups, however, decried the moves as prioritizing profits over people amid record industry valuations.
Block’s Financial Backdrop
Financially, Block reported strong Q4 2025 results, with revenue up 15% year-over-year, driven by Cash App growth and Bitcoin holdings. However, shares dipped 5% in after-hours trading following the announcement, reflecting investor concerns over execution risks in the AI transition. Dorsey, who holds dual CEO roles at Block and Bluesky, has long championed lean organizations—a philosophy now put to the test.
Looking Ahead: A Flatter, Smarter Future?
Dorsey’s proclamation that “most companies will do the same” echoes sentiments from other tech leaders. Microsoft and Google have ramped up AI hiring while trimming elsewhere, betting on a future where human-AI collaboration supplants traditional hierarchies. For now, Block’s cuts serve as a stark warning to the workforce: adapt to AI or risk obsolescence.
As the dust settles, questions linger about the human cost. Will AI truly deliver the “new ways of working” promised, or will it exacerbate inequality in an already precarious job market? Tech watchers will monitor Block closely as a bellwether for the industry’s AI reckoning.