ast Thursday, Jack Dorsey announced that Block was letting go over 4,000 people, or roughly 40% of its entire workforce. The CEO cited AI as the primary motivator: “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.”
Block joins a throng of technology and software companies justifying mass layoffs with AI. Already, some are accusing Dorsey of AI washing: using the threat of artificial intelligence as a smokescreen for his own managerial failures. Prior to last week’s news, Block had already laid off about 2,000 people since the beginning of 2024.
“[T]his move, specifically, feels like Block using AI as cover to unwind their previous over-hiring,” says Nate Svensson, an equity analyst at Deutsche Bank. Dorsey admitted to over-hiring in a separate X post and said it was because he had “incorrectly” siloed Block’s peer-to-peer payment unit Cash App from its core payments processing business. Dorsey also defended his own record: “we have and do run an efficient company… better than most.”
No wonder Dorsey is saying that. Though Block’s board still has his back, Dorsey faces shareholder pressure to turn around the company’s fortunes. Its stock is down 70% since its peak in 2021. In a poll on Blind of 271 current (and soon-to-be-former) Block employees, 87% of respondents had voted (as of Friday) that Dorsey should be fired or resign as CEO, according to a screenshot shared with Forbes.
To longtime followers of Dorsey’s meteoric career, the parallels between Block and Twitter — which Dorsey also cofounded in 2006 and led as CEO in two separate stints — are obvious. Like Block, Twitter struggled to maintain growth as a publicly traded company, ultimately leading Elon Musk to take it private in a $45 billion leveraged buyout and slashing its headcount by nearly 80%, from over 8,000 employees to 1,500. What’s more difficult to grasp is how exactly Dorsey has managed to convince Block’s board members and shareholders that he’s still the best person to lead the fintech company as it seeks to recover its mojo.
“I love Jack Dorsey. He gave me a job, gave me wealth, I don’t have ill-will towards him,” says one former Block software engineer laid off last week. “But he did start two companies that grew to large market caps… [and] both ended up laying off a massive percentage of the company. ”
Dorsey founded Square in 2009 with software engineer Jim McKelvey shortly after Twitter’s board forced him out as CEO for the first time. (The reported rationale: Dorsey was leaving work early for yoga sessions and fashion classes). With its flashy white credit card reader, Square grew like wildfire among the restaurants and small businesses eager for lower-cost card readers and payment networks. It went public in 2015 — the same year Dorsey returned to Twitter as CEO. Twitter shareholders soon began grumbling as Twitter lagged Facebook’s explosive growth, and Dorsey left his Twitter job at the end of 2021.
Square all the while was humming, and growth accelerated during the pandemic as merchant demand swelled. Cash App, its peer-to-peer payments app, was also growing quickly. The company expanded its ranks from roughly 3,800 employees at the beginning of 2020 to nearly 13,000 in 2023. “We were hiring like crazy,” recalls the laid off software engineer. “I did 200 engineering interviews in one year.”
All that growth masked some of Dorsey’s questionable decisions. In March 2021, Block agreed to buy a majority stake in Tidal, a little-used music streaming service backed by Jay-Z — whom Dorsey is friends with — for $237 million in cash and stock. Later that year, with cryptocurrencies soaring, Dorsey renamed Square Block to signal the company’s embrace of bitcoin and blockchain technology, and then dropped his title as CEO in favor of Block Head. The company launched Proto, a bitcoin mining hardware business, and Bitkey, a self-custodial wallet for bitcoin investors to securely hold their tokens.
As recently as August 2025, just a few months before bitcoin’s price tanked, Dorsey spoke during Block’s earnings call about how the company had built “the best [bitcoin] miner out there.” Selling those miners will be dramatically more difficult given bitcoin’s slump. During the same call, when Dorsey was asked about stablecoins, he said, “Our intention is to make sure that bitcoin becomes the native currency of the Internet and that it’s used as everyday money. And we think it can get there very quickly.”
He has also dove head-first into the buzzy buy-now, pay-later space. In August 2021, around the time its stock peaked, Block agreed to buy the Australian buy-now, pay-later fintech Afterpay for $29 billion in an all-stock deal.
“His focus has seemed all over the place,” says the former software engineer about Dorsey. “His narratives change every year or so.”
None of those post-Covid bets have seemed to make a big impact to date. Afterpay makes up a small percentage of overall revenue. The bitcoin businesses have also slumped in line with crypto asset valuations across the industry. Tidal has been the biggest disappointment. SimilarWeb pegs its traffic at No. 44 among all music streamers. A Delaware judge described the deal as “a terrible business decision” while ruling in Block’s favor after a Florida pension fund sued over the Tidal acquisition.
All the while, Block’s core payments businesses came under strain. Short seller Hindenburg Research alleged in 2023 that Block had misled investors by inflating its Cash App user metrics, facilitating widespread fraud and criminal activity through its “Wild West” approach to compliance, and profiting from those practices while overstating growth. (Block dismissed Hindenburg’s report as “designed to deceive and confuse investors.”) Last year, the Consumer Financial Protection Bureau ordered up to $120 million in consumer redress and a $55 million civil penalty over alleged fraud handling and security control failures, while a 48-state action imposed an $80 million penalty for BSA/AML violations requiring corrective measures. Separately, the New York Department of Financial Services fined Block $40 million for significant AML and virtual currency compliance deficiencies and required the appointment of an independent monitor. If the recent layoffs significantly reduced the ranks of Block’s compliance-focused and fraud-fighting teams, the company could open itself up to new, dangerous risks.
Looking forward, Dorsey insists Block’s business is still strong, citing continued growth in gross profitability, customer growth and improving profitability. Investors cheered the layoffs, sending Block shares up over 20% as of Monday’s market close.
With additional reporting from Jeff Kauflin
