Jack Dorsey’s Block Cuts 4,000 Jobs: Why Is the Company Reducing Staff Despite Strong Earnings?

Block, Inc. said on February 26, 2026, that it will reduce its workforce by more than 4,000 employees, lowering headcount from over 10,000 to just under 6,000. The decision affects over 40% of staff and marks the company’s largest restructuring to date.

Chief Executive Officer Jack Dorsey described the move in a public post on X as one of the hardest decisions in the company's history.

“Today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation,” Dorsey wrote.

He stated the layoffs are not tied to financial distress, adding that the company is not making the decision because it is in trouble. Instead, Dorsey linked the cuts to a structural shift driven by internal artificial intelligence systems, which he called “intelligence tools.” He said smaller and flatter teams using these tools can operate more effectively than larger organizations.

Is Block’s Business in Financial Trouble?

The tech giant announced the workforce reduction alongside strong fourth-quarter and full-year 2025 results.

Q4 2025 results:

• Gross profit: $2.87 billion, up 24% year over year
• Cash App gross profit: $1.83 billion, up 33%
• Square gross profit: $993 million, up 7%
• Adjusted operating income: $588 million (20% margin)
• Adjusted earnings per share: $0.65

Full-year 2025 results:

• Gross profit: $10.36 billion, up 17%
• Adjusted operating income: $2.08 billion (20% margin)
• Adjusted EPS: $2.37

For 2026, Block raised guidance:

• Gross profit: $12.2 billion, up 18%
• Adjusted operating income: $3.2 billion (26% margin, up 54%)
• Adjusted EPS: $3.66, up 54%

The company expects $450 million to $500 million in restructuring charges, mostly in the first quarter.

Shares rose about 25% in after-hours trading following the announcement and earnings release.

Dorsey Says Block “Over-hired” During Covid 

Dorsey acknowledged that Block expanded too quickly during the COVID-19 period.

“yes we over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024,” Dosey disclosed.

He added that the expansion into lending, banking, and buy-now, pay-later services added operational complexity.

Dorsey said the company is now targeting more than $2 million in gross profit per employee, four times its pre-COVID efficiency level of about $500,000 per employee, which remained flat from 2019 through 2024.

Block had approximately 3,835 to 3,900 employees at the end of 2019. Headcount peaked at 12,200-12,500 in 2022–2023. Before the latest cuts, Block reported 10,205 full-time employees at the end of 2025. Earlier in 2025, it eliminated 931 roles, about 8% of staff.

How Will Artificial Intelligence Reshape Block’s Operations?

Dorsey said internal intelligence systems are already changing how the company builds products and manages operations.

“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 has developed internal agent-based systems, including one called “Goose,” used in engineering and operational workflows. Dorsey said model capabilities improved significantly in December 2025.

The company’s updated operating model centers on four areas:

• Customer capabilities
• Interfaces
• Proactive intelligence using real-time data
• An orchestration model for operations

Block said customers will eventually be able to build features directly on its infrastructure through company interfaces.

What Support Will Affected Employees Receive?

Block outlined the following severance terms:

• 20 weeks of salary plus one additional week per year of tenure
• Equity vesting through the end of May
• Six months of health coverage
• Retention of corporate devices
• $5,000 for transition expenses in the United States, with local equivalents elsewhere

Dorsey wrote, “to those of you leaving…i’m grateful for you, and i’m sorry… you built what this company is today.”

Communication systems will remain open temporarily so employees can say goodbye, and Dorsey confirmed that a live video session will be hosted to address the affected staff.

Conclusion

Block’s decision to cut more than 4,000 jobs follows record earnings and raised guidance. The company is consolidating operations, targeting higher gross profit per employee, and embedding intelligence systems across engineering, risk, and customer workflows. 

Dorsey has framed the move as a structural redesign rather than a response to declining performance. The company’s results, headcount history, and updated margin targets indicate a shift toward a smaller organization built around internal automation and tighter operational discipline.

Sources:

• Jack Dorsey public post on X: Confirming the huge number of layoffs. 
• Reuters: Jack Dorsey’s Block to cut nearly half its workforce in AI overhaul, shares surge
• Bloomberg: Jack Dorsey’s Block Slashes Nearly Half Its Staff in AI Bet
• Block Engineering: What is Goose