Twitter founder Jack Dorsey’s financial technology group Block announced a shocking downsizing plan last Thursday, February 26th, that is shaking up the industry. The company is expected to cut nearly half of its workforce and shift towards an operation model driven by artificial intelligence (AI).
This move by Block has heightened concerns in the U.S. about AI triggering a wave of unemployment. According to statistics, just in late January of this year, several large companies including Amazon, UPS, Nike, and Home Depot have collectively cut over 52,000 positions.
The group, which owns Square and Cash App, plans to reduce over 4,000 employees, downsizing its workforce from its previous size of tens of thousands to below 6,000.
In Block’s fourth-quarter financial report in 2025, it showed revenue reaching $6.3 billion with continuous profit growth. Dorsey emphasized that the layoffs are not due to financial crisis but rather for transformation.
In a shareholder letter, Dorsey specifically attributed the layoffs to the development of AI technology, stating, “AI tools have changed the meaning of building and operating a company. We have seen this internally.”
Following this news, Block’s stock price surged over 25% in after-hours trading.
Dorsey stated that rather than taking a gradual downsizing approach, he prefers to take decisive, one-time action.
He wrote on social media, “We made this decision not because the company is in trouble. Our business is strong… but things have changed. The intelligent tools we have developed and utilized, combined with a leaner, flatter team, have opened up a whole new way of working.”
Dorsey warned that this structural change is just beginning. He believes that Block is not a pioneer, but many companies are moving too slowly. He expects that in the next year, “most companies” will come to the same conclusion and undertake similar workforce adjustments.
Previously, Amazon CEO Andy Jassy had also warned that AI would lead to a decrease in the demand for many positions, especially in the white-collar class.
Goldman Sachs economist Pierfrancesco Mei pointed out in a report released on Tuesday, February 24th, that while the impact of AI on unemployment is currently mild, signs are already clear. Goldman Sachs predicts that due to AI replacing manpower, the U.S. unemployment rate is expected to increase from the current 4.3% to 4.5% by the end of the year.
However, while the company is downsizing on a large scale to pursue “operational efficiency,” Block is facing financial impacts in the realm of cryptocurrency due to radical speculation. Affected by the decline in Bitcoin prices, Block reported a loss of $234 million this quarter with earnings per share reduced to only 19 cents.
In contrast, competitors like Stripe who opt for more conservative strategies such as stablecoins saw significant growth during the same period. This shows that while Block is taking a cold, streamlined approach on labor costs, it has incurred significant losses in high-risk investments due to Dorsey’s personal preference for Bitcoin.