Block cuts 40% of workforce — from 10,000 to 6,000 — citing AI-driven efficiency as the primary reason
Feb 26, 2026
Key Points
- Block cuts 40% of workforce to 6,000 employees, with CEO Jack Dorsey attributing the move to AI-driven efficiency enabling smaller, flatter teams rather than financial distress.
- The severance package includes 20 weeks of salary plus one week per year of tenure, equity vesting through May, and six months of healthcare.
- Block's stock surges roughly 25% on the announcement, though the company remains down 30% over six months as it pursues a leaner operating model powered by AI.
Summary
Block is cutting 40% of its workforce, from over 10,000 employees to just under 6,000. CEO Jack Dorsey attributed the reduction to AI-driven efficiency, arguing that intelligence tools paired with smaller, flatter teams enable a fundamentally new way of operating. He framed the choice as decisive action now versus gradual cuts over months or years, which he said damage morale, focus, and stakeholder trust.
Dorsey emphasized that the decision was not born from financial distress. Block's gross profit continues to grow, customer count is rising, and profitability is improving. The severance package includes 20 weeks of salary plus one additional week per year of tenure, equity vesting through May, six months of healthcare, corporate devices, and $5,000 per departing employee.
Block's stock has declined 30% over the past six months and 17% over the past month, trading at roughly $54 compared to a peak of $263. The company has largely avoided the deeper valuation collapses that hit other SaaS businesses, but the stock remains far below historical highs. The cut differs from typical cost-cutting layoffs. Rather than framing the reduction as cyclical correction or operational efficiency alone, Dorsey tied it directly to AI augmentation enabling half the headcount. The reduction is substantially larger than typical 5-8% layoff rounds and aligns with predictions about how AI adoption might reshape organizational headcount at scale. Hosts noted this may rank among the largest headcount reductions as a percentage of workforce in S&P 500 history.