Nearly half layoffs, stock price soars 27%! Block(XYZ.US) "Embracing AI" wins applause on Wall Street

Block (XYZ.US) announced on Thursday that it will lay off over 4,000 employees, approximately half of its total workforce. Following the announcement, the stock surged more than 27% in after-hours trading.

Block co-founder and CEO Jack Dorsey stated in a letter to shareholders, “Today, we announced a difficult decision to our team. The company’s size will be reduced by nearly half, from over 10,000 employees to less than 6,000, meaning more than 4,000 employees will leave or enter negotiations.”

This layoff news was released alongside Block’s Q4 earnings report. The financials showed that the payment company’s adjusted earnings per share for the quarter were 65 cents, with revenue reaching $6.25 billion, roughly in line with analyst expectations of 65 cents per share and $6.24 billion in revenue. The company’s gross profit increased 24% year-over-year to $2.87 billion.

Looking ahead for the full year, Block expects adjusted earnings per share of $3.66, above analysts’ forecast of $3.22.

A company securities filing indicated that due to the layoffs, Block expects to incur expenses of approximately $450 million to $500 million, mainly related to severance pay, employee benefits, and non-cash costs associated with equity vesting. The company anticipates most restructuring costs will be incurred in the first quarter.

Chief Financial Officer Amrita Ahuja said that the layoffs will lay a solid foundation for the company’s “next phase of long-term growth.”

Ahuja stated, “We chose to adjust our operations as the business accelerates. We recognize that by building a leaner, more skilled team and leveraging AI to automate more tasks, we can move forward more quickly.”

Dorsey expects that as companies gain higher efficiency from “smart tools,” others will also make similar personnel adjustments.

“In the next year, I believe most companies will reach the same conclusion and make similar structural changes,” Dorsey said. “I prefer to proactively and transparently complete the transformation rather than respond passively.”

Recently, companies like Pinterest (PINS.US), CrowdStrike (CRWD.US), and Chegg (CHGG.US) have announced layoffs, directly attributing the restructuring of employment to AI.

Dorsey posted on social platform X that he faces two choices: either gradually lay off employees over the coming months or years, or “act decisively now.”

“I chose the latter,” he wrote. “Multiple rounds of layoffs would severely damage morale, distract us, and betray the trust of customers and shareholders in our leadership.”

The company’s annual report shows that as of December 31, 2025, Block has 10,205 employees worldwide.