Jack Dorsey says AI drove layoffs at Block as shares surge

The chief executive of block announced that the company will lay off more than 4, 000 of its 10, 000-plus employees as it reconfigures to capitalize on artificial intelligence, a shift that pushed the stock sharply higher. The move matters now because the CEO explicitly tied the reductions to AI tools and investors responded by bidding up the shares.

Jack Dorsey frames cuts at Block as AI-driven

Jack Dorsey, Block's CEO, told shareholders that the company is reorganizing around intelligence tools and that a smaller team using the tools the company is building can "do more and do it better. " In a letter to shareholders he wrote, "The core thesis is simple. Intelligence tools have changed what it means to build and run a company. " Those comments were also posted on a social platform he co-founded.

Scale of layoffs and company size detailed

Dorsey announced that Block will lay off more than 4, 000 employees out of a workforce of more than 10, 000. He outlined various ways the company will support those laid off and said that for employees overseas the terms might differ. It was unclear which employees would be laid off where.

Market reaction: steep premarket jump and after-hours spike

Shares in Block rose more than 20% in premarket trading on Friday after the announcement. The stock had gained 5% on Thursday to $54. 53 before the company reported its earnings, and it shot up to nearly $69 in after-hours trading when the cuts and the AI rationale were announced. Analysts said the assertion that the job cuts would improve profitability and efficiency prompted investors to buy.

Quarterly results and global footprint

The mobile payments services provider reported that fourth-quarter gross profit jumped 24% from a year earlier. Block is a global technology company founded in 2009 and based in San Francisco; it operates in the United States, Canada, parts of Europe, Australia and Japan and is the parent company to online payment platforms such as Square and Cash App.

Commentary and wider corporate layoff context

Stephen Innes of SPI Asset Management said the episode provides a public case study of a CEO explicitly linking intelligence tools to workforce change, noting that for years there had been debate about whether AI would dent jobs at the margin. He added that "other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not. "

Support measures, uncertainty about locations and reporting names

In his social-platform post, Dorsey outlined support for those departing and said terms for employees overseas might differ. It was unclear in the provided context which employees will be let go in which countries. The coverage names Elaine Kurtenbach, Konstantin Toropin and Matt O'Brien in connection with the reporting.

The layoffs at Block come amid a wave of job cuts across U. S. companies in recent months; other high-profile employers that have announced layoffs include UPS, Amazon and Dow.

Separately, the context includes a 2015 image note placing Jack Dorsey on the floor of the New York Stock Exchange when he was Square CEO in 2015.