Jack Dorsey says his payments company is thriving, but he's still cutting more than 4,000 jobs. Block, the parent of Square and Cash App, told investors Thursday it will eliminate roughly 40% of its staff as it leans harder into artificial intelligence. In a shareholder letter, Dorsey said new "intelligence tools" have transformed how companies can be built and run and the move is a strategic reset, the Wall Street Journal reports. Block shares jumped more than 20% in after-hours trading following the announcement and a quarterly revenue report that slightly beat Wall Street expectations at $6.25 billion.
On an earnings call, Dorsey said a turning point came in December, when he realized how advanced AI models had become. "If there are any gaps in our usage of AI right now, it's an application gap," he said. In a memo to employees posted on X, the platform he co-founded, Dorsey said he had "two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now," and he chose the latter.
- Dorsey wrote that Block's business is strong, "we continue to serve more and more customers, and profitability is improving. but something has changed. 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. and that's accelerating rapidly."
- Dorsey said Block wouldn't "disappear people from slack and email and pretend they were never here." He said communication channels would remain open until Thursday evening and he would host a live video session to thank employees. "I know doing it this way might feel awkward," he wrote. "I'd rather it feel awkward and human than efficient and cold."
- Block's move lands amid a broader wave of white-collar cuts blamed, at least in part, on AI. Salesforce has already shed around 4,000 customer-service roles as it automates more tasks, and Pinterest is slashing nearly 15% of its workforce while redirecting resources to AI-focused jobs.
- Futures in the S&P 500, Dow Jones, and Nasdaq dropped as investors digested the implications of Dorsey's move, the AP reports. Block "just did what most CEOs have only whispered about in boardrooms," said Stephen Innes of SPI Asset Management. "For years we've debated whether AI would dent jobs at the margin. Now we have a public case study where the CEO explicitly says intelligence tools have changed what it means to build and run a company."
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