Block Announces Sweeping Layoffs, Cutting Nearly Half Its Workforce
In a dramatic corporate restructuring, Block, the company led by CEO Jack Dorsey, has announced the most significant layoffs in recent times. The firm has slashed approximately 40% of its jobs, which translates to nearly half of its workforce in a single round of cuts. This move has reduced the employee count from over 10,000 to just under 6,000, impacting over 4,000 individuals.
CEO Jack Dorsey's Rationale for the Drastic Action
Speaking about the layoffs, Dorsey emphasized his desire to avoid repeated rounds of job cuts, which he believes lead to morale damage and prolonged uncertainty. In a post on X, he stated, "Repeated rounds of layoffs are destructive to morale, focus, and to the trust of customers and shareholders. I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome."
Dorsey framed these cuts as part of a broader strategic shift toward leaner, AI-driven operations. He highlighted that the company is already witnessing how intelligence tools, combined with smaller and flatter teams, are enabling a new way of working. "This fundamentally changes what it means to build and run a company," he added. During Block's earnings call, Dorsey predicted that more companies will follow suit, leveraging AI to drive efficiency gains.
Details of the Layoffs and Severance Packages
The affected employees will receive comprehensive severance packages, which include:
- Salary for 20 weeks plus an additional week per year of tenure.
- Equity vested through the end of May.
- Six months of healthcare coverage.
- Retention of corporate devices.
- A $5,000 transition allowance (with similar support for international employees based on local requirements).
Dorsey assured that communication channels will remain open through Thursday evening Pacific time to allow for proper goodbyes, and he will host a live video session to thank everyone. "I know doing it this way might feel awkward. I’d rather it feel awkward and human than efficient and cold," he wrote.
Analyst Perspectives and Broader Implications
Analysts have noted that while the scale of Block's layoffs is extreme, the severance packages offered are relatively generous. Georgetown University professor Brooks Holtom told Business Insider that one-time cuts may be less damaging than repeated rounds, though the sheer size of Block's reduction is striking. This move underscores a growing trend in the tech industry, where companies are increasingly turning to AI to streamline operations and reduce human workforce dependencies.
Dorsey reiterated that the decision was not due to financial trouble, as Block's business remains strong with growing gross profit and customer base. Instead, it reflects a proactive shift to adapt to rapid technological changes. "We're going to build this company with intelligence at the core of everything we do," he declared, signaling a future focused on AI integration and customer-centric innovation.
