Jack Dorsey’s Big Bet: Block

With input from AP, Axios, CNBC, and Business Insider.

Block shook the tech world on Thursday with a move that was both brutal and unapologetically forward-looking: about 4,000 of its roughly 10,000 employees are being let go — a near-40% cut — as the company leans into artificial intelligence to retool how work gets done. The announcement sent the stock surging more than 20% in premarket trading and caused a fresh wave of debate about what AI means for jobs.

In a blunt letter to shareholders and a post on X, the company’s co-founder said the math was simple: smarter tools plus smaller, flatter teams equals more output.

“The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” he wrote. “A significantly smaller team, using the tools we’re building, can do more and do it better.”

Block — the parent of payments services like Square and Cash App — also reported a bump in profitability: fourth-quarter gross profit jumped 24% year-over-year. Executives argued the cuts are a structural reset to speed growth, not a reaction to weak performance.

Not everyone is convinced. Stephen Innes of SPI Asset Management called Block’s move a public test case for the claim that AI can replace swaths of white-collar work.

“For years we debated whether AI would dent jobs at the margin. Now we have a public case study,” Innes wrote in commentary cited by analysts.

Block says it’s trying to soften the blow. The company outlined severance and support: roughly 20 weeks base pay plus one extra week per year of tenure, equity vesting through the end of May, six months of health coverage, the right to keep corporate devices and a $5,000 payment. Dorsey noted terms may vary for employees overseas.

The CEO framed the timing as a choice: trim gradually and drag morale through months of uncertainty, or act decisively now and rebuild from a smaller, AI-powered core. He chose the latter.

“I 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,” he wrote.

Wall Street rewarded decisiveness. Shares, which had been under pressure over the past year, spiked as traders cheered the promise of leaner payrolls and faster unit economics. But the human cost is obvious and raw: thousands of employees will be searching for new jobs at a time when AI anxiety is high.

This isn’t the first time tech CEOs have tied layoffs to AI — but Block’s frankness is notable. Many firms have danced around the AI angle; Block put it front and center. That candor may make other leaders more likely to follow suit, or it could invite backlash from workers, lawmakers and customers who worry about the social fallout.

The big unanswered question: can Block truly grow revenue and product capability with a much smaller staff? If the company proves it can, other public firms will take notice. If not, this may look like a crash test that burned hundreds of careers for marginal gains.

Either way, the message is clear. For Block, the future is now — and it’s being run leaner, faster, and more machine-heavy. For millions of workers watching, it’s a reminder that the AI era is not a distant horizon. It’s here, and it’s reshaping the payroll.