Block shares jump after company says it will cut about 40% of staff
block stock surged after it would axe 40% of employees, sending shares higher and sharpening debate over AI-driven job losses. The move, announced on Thursday and followed by a sharp market reaction on Friday, highlights the tension between immediate investor gains and broader economic risk.
Block cuts and investor reaction
Shares of Block popped 18% on Friday as investors digested the firm's earnings and the news that it would cut more than 4, 000 jobs, reducing its workforce by around 40%. The company's announcement on Thursday that it would axe nearly half of its workforce was met with celebration by shareholders, who focused on the prospect of fatter margins and improved earnings.
Details of the layoffs
The firm said the reductions amount to more than 4, 000 employees and represent roughly a 40% decline in headcount. Executives explicitly cited AI efficiency as a factor behind the cuts in comments on the company's earnings call and in subsequent posts. At the moment, the outcome is clear for investors: margins expanded and earnings beat expectations.
Citrini report and the future
Observers have pointed to a viral report from Citrini Research that sketched a possible future shaped by AI. That report, written as a look back from 2028, outlined a scenario in which AI job losses could spark a white-collar recession in 2028. The paper speculated unemployment could rise to over 10% and said the first wave of "layoffs due to human obsolescence" would begin in early 2026. Part of Citrini Research's viral view of an economy reshaped by AI might be playing out in real time on Friday.
Shah's comments and AI
Alap Shah, the investor who helped author Citrini's viral report, used Block's cuts to underscore the paper's foresight. Shah wrote in a post Thursday evening that the situation is "a textbook example of the changes we are warning about in The Global Intelligence Crisis. " He added that it is "a cold look at the nature of AI's progress: companies can accelerate output while drastically lowering coordination costs. " Shah framed the cuts as evidence of the dynamics the report described.
Market pushback and rebuttals
While reduced headcount is often a reason for markets to celebrate, the sharp reaction also illustrates the market conundrum the Citrini report highlighted: investors may welcome efficiency gains, but if America's jobless ranks grow, the wider economy could suffer. The report's language was explicit about market mechanics: "They did exactly what layoffs are supposed to. Margins expanded, earnings beat, stocks rallied, " it said of AI-fueled job cuts, and it speculated that those within the software space could see their "wealth explode" even as "cracks" appear in other areas of the economy.
The report helped stoke a major sell-off in stocks at the start of the week, and not everyone agreed with its unemployment scenario. In a rebuttal, analysts at Citadel Securities suggested that job gains stemming from AI could offset losses, offering an opposing view on how AI will affect net employment.
The sequence of events is clear in recent days: the company announced on Thursday that it would axe nearly half its workforce, executives cited AI efficiency on the earnings call and in posts, shares popped 18% on Friday as investors processed earnings plus the cuts, and commentators tied the development back to the Citrini Research scenario that envisions a white-collar recession by 2028 with unemployment above 10% and early waves of obsolescence starting in early 2026.
Unclear in the provided context: whether the company gave additional details on which units will be affected or how severance and transition support will be handled.
As markets absorbed the announcement, the tension between immediate corporate profitability and the broader labor-market implications remained at the center of the discussion.
