Nearly half of the staff were laid off, and the stock price surged 27%! Block (XYZ.US) "embracing AI" wins praise from Wall Street.

Block (XYZ.US) announced on Thursday that it will lay off more than 4,000 employees, which is approximately half of its total workforce. In response to this news, the stock surged over 27% in after-hours trading. Jack Dorsey, co-founder and CEO of Block, stated in a letter to shareholders, "Today we announced a difficult decision to our team. The company will reduce its workforce by nearly half, from over 10,000 employees to less than 6,000 employees, meaning that more than 4,000 employees will either be laid off or go through a negotiation process." The layoffs were announced simultaneously with Block's fourth-quarter financial report. The report showed that the payment company had adjusted earnings per share of $0.65 for the quarter, with revenue reaching $6.25 billion, which was in line with analysts' expectations of $0.65 earnings per share and $6.24 billion in revenue. The company's gross profit increased by 24% year-over-year, reaching $2.87 billion. Looking ahead for the full year, Block expects adjusted earnings per share to be $3.66, exceeding analysts' expectations of $3.22. According to a securities filing, Block expects to incur expenses of approximately $450 million to $500 million due to the layoffs, mainly including severance payments, employee benefits, and non-cash expenses related to equity ownership. The company anticipates that most of the restructuring costs will occur in the first quarter. Block's CFO, Amrita Ahuja, stated that the layoffs will lay a strong foundation for the company's "next phase of long-term growth." Ahuja said, "We chose to adjust our operating model as the company accelerates its business. We realized that by building a more streamlined, high-quality team and utilizing AI for more work automation, we can move forward at a faster pace." Dorsey expects that as businesses gain increased efficiency from "smart tools," other companies will make similar structural adjustments to their workforce. "In the next year, I believe that the vast majority of businesses will reach the same conclusion and make similar structural adjustments," Dorsey said. "I prefer to actively and transparently undergo this transformation rather than passively react to it." Recently, companies like Pinterest (PINS.US), CrowdStrike (CRWD.US), and Chegg (CHGG.US) have also announced layoffs, attributing the reasons directly to the reshaping of their workforce structure by AI. Dorsey posted on the social platform X, stating that he faced two choices: either gradually lay off employees over the coming months and years, or "act decisively now." "I chose the latter," he wrote. "Multiple rounds of layoffs would severely damage morale, distract focus, and betray customer and shareholder trust in the company's leadership." According to the company's annual report, as of December 31, 2025, Block had 10,205 employees globally.