Breaking News! Wall Street Fintech Giant Cuts Nearly Half of Its Staff Overnight, Yet Shares Soar 24%. Is the AI Efficiency Revolution Killing Traditional Jobs?

Fintech company Block announces a major restructuring plan, cutting approximately 4,000 employees, nearly half of its workforce. The decision was announced in a letter to shareholders, with co-founder and CEO Jack Dorsey admitting in the letter that employees only learned of the news on the day of the announcement.

Dorsey predicts that most companies will be forced to make similar structural adjustments within the next twelve months. He wrote that he believes the company recognized this relatively early, whereas most peers responded slowly. He prefers to proactively and transparently drive change rather than react passively in the future.

The company’s CFO, Amrita Ahuja, later added in an interview that this move is bold and decisive but built on a solid foundation. She believes this will enable the company to serve customers more quickly.

The market responded very positively. After the announcement, Block’s stock price surged over 24% in after-hours trading. Market observers interpret this sharp price movement as a positive evaluation of the company’s strategic shift to reconstruct operations using AI technology, even at the cost of significantly reducing its workforce.

Ahuja’s mention of a “solid foundation” is supported by clear financial data. According to the shareholder letter, Block achieved $10.36 billion in gross profit in 2025, a 17% increase year-over-year. More importantly, its quarterly gross profit growth doubled from Q1 to Q4.

Dorsey highlighted several business strengths: user growth on its Cash App has regained momentum, the loan product scale continues to expand, and its merchant services business Square maintains accelerated growth in total payment volume. Strong financial performance provides ample buffer for this large-scale restructuring.

This layoff is not an isolated event. Since 2024, due to weak stock performance, Block has been continuously adjusting its business model and staffing. Meanwhile, the company has increased investment in AI tools to improve operational efficiency, including developing an internal tool called Goose.

The announced layoffs are actually a continuation and climax of multiple rounds of rolling job cuts linked to annual performance reviews, bringing the total to nearly half of the staff at once.

In an internal letter to all employees, Dorsey detailed the severance plan: affected employees will receive 20 weeks of base pay, plus an additional week per year of service; vested equity can be retained until the end of May; the company will also provide six months of health insurance, equipment, and $5,000 in transitional support. For employees outside the U.S., similar plans compliant with local laws will be offered.

He emphasized that this decision was not due to the company being in trouble; on the contrary, business momentum remains strong. But the environment has changed. The combination of AI tools and a leaner team is creating a new way of working, rapidly transforming the company’s structure and operations. He chose to act immediately rather than delay for months or years, as prolonged layoffs would severely damage morale, focus, and trust.

Dorsey acknowledged the decision carries risks and that some judgments may be mistaken, so flexibility will be maintained during implementation to address deviations. He promised that internal communication channels will remain open until Thursday night Pacific Time for employees to say goodbye, and he personally hosted a video call to express gratitude.

At the end of the letter, Dorsey expressed appreciation and apologies to departing employees, emphasizing that this decision does not diminish their past contributions. For remaining staff, he called for unity to rebuild the company around AI technology, helping customers adapt to this shift and move toward a future where clients can build custom features using their underlying capabilities.

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