Jack Dorsey’s Block to cut over 4,000 jobs, make greater use of AI tools

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Block CEO Jack Dorsey in Miami in 2021.MARCO BELLO/AFP/Getty Images

Block XYZ-N on Thursday said it will cut over 4,000 jobs, or nearly half its workforce, as advances in AI reshape how it builds and runs its business, sending its shares up 22 per cent in after-hours trading.

The layoffs underscore how the AI boom is translating from hype into work-force changes, fueling long-held concerns among workers and economists that the technology could eliminate roles even as it boosts productivity and profits.

“Intelligence tools have changed what it means to build and run a company. We’re already seeing it internally. A significantly smaller team, using the tools can do more and do it better,” CEO Jack Dorsey said in a statement.

“I don’t think we’re early to this realization. I think most companies are late,” he added.

In a post on social media platform X, Dorsey said Block opted for a single deep round of cuts instead of multiple smaller layoffs over time. He said a smaller company would also give it space to grow the business the right way, instead of constantly reacting to market pressures.

Investors have been rewarding companies that show AI-driven cost savings, and the sharp workforce reduction signals the scale at which the technology is starting to translate into lower expenses and higher margins in some industries.

The company said it expects to incur roughly US$450-million to US$500-million in restructuring charges.

Block posted an adjusted profit of 65 US cents per share in the three months ended Dec. 31, compared with 47 US cents a year earlier.

Gross profit grew 24 per cent in the quarter, driven by a 33-per-cent surge in the Cash App business, which enables peer-to-peer mobile payments.