Block Shares Rocket 24% as Jack Dorsey Slashes Workforce by Nearly Half in AI Pivot

New Delhi, February 27, 2026: In a dramatic move that has sent shockwaves through the fintech sector, Block Inc. (formerly Square) saw its shares surge by 24% in after-hours trading on Thursday. The rally followed an announcement from CEO Jack Dorsey that the company is slashing its workforce by approximately 40%, cutting over 4,000 positions to transition into an “intelligence-native” organization.

The sweeping restructuring aims to reduce Block’s headcount from over 10,000 employees to a leaner team of fewer than 6,000.

The AI Efficiency Play

While layoffs are typically viewed as a sign of corporate distress, Dorsey framed this decision as a proactive evolution. In a candid letter to shareholders accompanying the company’s Q4 2025 earnings report, Dorsey explained that advances in Artificial Intelligence have fundamentally changed the requirements for running a global tech firm.

“A significantly smaller team, using the tools we’re building, can do more and do it better,” Dorsey stated. “Intelligence tool capabilities are compounding faster every week.”

By moving to a “smaller and flatter” structure, Block intends to leverage AI to automate internal processes and accelerate product development. Dorsey noted that he preferred a single, decisive cut over gradual layoffs, which he described as “destructive to morale and trust.”

Financial Performance Fueling the Surge

The market’s enthusiastic response wasn’t just about cost-cutting; it was backed by a robust earnings beat. Block reported a 24% year-over-year increase in gross profit, reaching $2.87 billion for the quarter.

Key Financial Highlights:

• Cash App Growth: Gross profit for the Cash App ecosystem jumped 33% to $1.83 billion.
• Adjusted Earnings: The company posted adjusted earnings of $0.65 per share, surpassing analyst expectations.
• 2026 Guidance: Block raised its full-year 2026 outlook, targeting a gross profit of $12.2 billion and an operating margin of 26%.

A “Seminal Moment” for Tech Workers

Analysts are calling Block’s restructuring a “seminal moment” in the AI era. While previous tech layoffs in 2023 and 2024 were largely blamed on post-pandemic over-hiring and high interest rates, Block is explicitly citing AI-driven productivity as the reason nearly half its staff is no longer needed.

To support departing employees, Block is offering a generous severance package, including 20 weeks of salary, plus one week for every year of tenure, and six months of healthcare coverage.

The Road Ahead

As Block pivots toward its “intelligence-native” future, it sets a challenging precedent for the rest of Silicon Valley. Dorsey predicted that most tech companies are currently “late” to this realization and will likely follow suit with similar structural adjustments within the next year.

For investors, the message is clear: the market is rewarding companies that can successfully trade human overhead for AI-driven margins.