Block, led by Twitter co-founder Jack Dorsey, said on Thursday it will cut more than 4,000 jobs, representing nearly half its workforce, amid an artificial intelligence boom.
Dorsey stated that intelligence tools have changed what it means to build and run a company and said the shift is already visible internally, adding that a significantly smaller team using such tools can achieve more and do so more effectively. He further stated that the company is not early in reaching this realisation and that most firms are late.
In a post on social media platform X, formerly known as Twitter, Dorsey spoke of having taken one of the hardest decisions in the company’s history.
He stated that the cuts were not being made because the business was in difficulty, adding that the company remains strong, with gross profit continuing to grow, customer numbers increasing and profitability improving. However, he said something fundamental has changed, pointing to the intelligence tools the company is building and deploying, combined with smaller and flatter teams, as enabling a new way of working that alters what it means to build and run a company, and that this transformation is accelerating rapidly.
Dorsey stated that the company opted for a single, deep round of cuts rather than multiple smaller layoffs over time. He said repeated rounds of reductions are destructive to morale, focus and to the trust customers and shareholders place in leadership, and added that he would rather take a clear and decisive action now and build from a position the company believes in than manage a gradual reduction of staff towards the same outcome.
He informed that laid-off employees will receive 20 weeks’ salary plus one additional week per year of tenure. They will also be provided with six months of healthcare coverage, be allowed to retain corporate devices and receive $5,000 to use as they see fit during the transition.
Co-founded by Dorsey in 2009 as Square, the company rebranded to Block in 2021 to reflect its broader focus on blockchain technology.
Block said it expects to incur restructuring charges of approximately $450 million to $500 million. The company reported an adjusted profit of 65 cents per share for the three months ended 31 December, compared with 47 cents per share in the same period a year earlier.
