BANGKOK, Thailand: Financial technology firm Block is cutting more than 4,000 jobs, roughly 40 percent of its workforce, as it restructures around artificial intelligence, a move that sent its shares sharply higher in premarket trading on February 27.
CEO Jack Dorsey said the decision reflects how AI tools are transforming how companies operate.
"The core thesis is simple. Intelligence tools have changed what it means to build and run a company," Dorsey wrote in a letter to shareholders of Block, which owns online payment platforms Square and Cash App. "A significantly smaller team, using the tools we're building, can do more and do it better."
The announcement pushed Block's stock up more than 20 percent before the market opened. Shares had already risen five percent on February 26 to US$54.53 before earnings were released, then climbed to nearly $69 in after-hours trading.
The mobile payments provider reported that fourth-quarter gross profit rose 24 percent from a year earlier.
Dorsey's remarks, also posted on X, the social media platform he co-founded, explicitly cited AI as a central factor behind the layoffs — a connection some other companies have been more cautious about making.
"For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company," said Stephen Innes of SPI Asset Management in a commentary.
"Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not," he added.
San Francisco-based Block, founded in 2009, operates in the United States, Canada, parts of Europe, Australia, and Japan.
In a post on X, Dorsey said the company would provide support for employees affected by the cuts, noting that terms for overseas workers might differ. It was not immediately clear which roles or regions would be most affected.
The layoffs add to a wave of job reductions by major U.S. companies in recent months. While overall layoffs remain at relatively healthy levels, firms including UPS, Amazon, Dow, and The Washington Post have also announced significant workforce cuts.
