Block shares kicked up 4.99 per cent on the day when the fintech outfit said it will sack 40 per cent of its workforce.
The payments outfit, which includes Square and Cash App, reckons more than 4,000 people will be shown the door.
Block founder Jack Dorsey leaned on the AI story in a letter to shareholders. “The core thesis is simple. Intelligence tools have changed what it means to build and run a company.”
Shares rallied more than 20 per cent in after-hours trading, because nothing says “future” like fewer humans.
On the earnings call, Dorsey said something happened in December of last year when he clocked how capable and intelligent AI models had become.
“If there are any gaps in our usage of AI right now, it’s an application gap,” he said.
Plenty of big firms have already been binning white-collar roles while waving the AI flag. Salesforce cut roughly 4,000 customer-support jobs last year, while Pinterest said it is laying off nearly 15 per cent of its workforce as it shuffles resources toward AI roles.
Earlier this week, nerves about AI wiping out jobs helped spark a market rout after a report sketched a grim future for the US economy.
Analysts and economists pushed back on that scenario, but Block’s scale of cuts is unlikely to calm anyone down.
In a note to staff posted on X, Dorsey said the decision was not because the company is in trouble.
He said he wrestled with whether to “cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter.”
The timing landed with Block reporting fourth-quarter revenue of $6.25 billion, slightly ahead of expectations, and a higher gross profit outlook for 2026.
Cash App monthly active users hit 59 million, up from 58 million the previous quarter.
Block has been a bit all over the place in recent years amid competition. Square, which processes payments mainly for small businesses, is up against everyone from Fiserv and Shopify to Toast.
Operating expenses rose through 2025, partly due to Cash App’s expansion of its lending products. A November BTIG research note warned the firm could be “unsuccessful in controlling costs, which pressures operating margins.”
Block said most layoffs will occur in the first quarter of this year and will be completed by the second quarter. It expects charges of $450 million to $500 million tied to the cuts.
Dorsey said he planned a live video call to thank staff for their work. “I know doing it this way might feel awkward,” he wrote. “I’d rather it feel awkward and human than efficient and cold.”
