Block CEO ties AI to sweeping cuts as shares jump
Jack Dorsey told shareholders that block will cut more than 4, 000 of its 10, 000 plus employees as the company reconfigures to capitalize on artificial intelligence, and shares surged in premarket trading Friday.
Shares jump after Dorsey links cuts to AI
Shares in the financial technology company Block soared more than 20% in premarket trading Friday following Dorsey’s announcement. The company’s stock had gained 5% on Thursday to $54. 53 before Block reported earnings, then shot up to nearly $69 in after-hours trading.
Dorsey frames smaller workforce around intelligence tools
In a letter to shareholders, Dorsey wrote, "The core thesis is simple. Intelligence tools have changed what it means to build and run a company. A significantly smaller team, using the tools we're building, can do more and do it better. " Those comments, explicitly naming AI as a key driver behind the layoffs, were also posted on X, or Twitter, a company he co-founded.
How Block described the cuts and support for employees
Block said it would lay off more than 4, 000 employees out of a workforce numbering 10, 000 plus as it reconfigures around AI. In a post on Twitter, Dorsey 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.
Investor reaction and financials
The assertion that the job cuts will add to Block's profitability and efficiency prompted investors to buy, analysts said. The mobile payments services provider reported its fourth-quarter gross profit jumped 24% from a year earlier.
Voices weighing in and wider context
Stephen Innes of SPI Asset Management said, "For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company. " He added, "Other large employers have announced tens of thousands of cuts in recent months. Some have downplayed the AI link. Block did not. "
Company footprint and broader layoffs trend
Block, founded in 2009 and based in San Francisco, is the parent company to online payment platforms such as Square and Cash App and operates in the United States, Canada, parts of Europe, Australia and Japan. Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months; other high-profile companies that have announced layoffs recently include UPS, Amazon, Dow and the Washington Post.
The article included a fundraising appeal asking for a generous monthly contribution to help secure its future. A 2015 photo shows Square CEO Jack Dorsey on the floor of the New York Stock Exchange.
Block has announced the cuts and outlined employee support; the company will carry out recovery and transition steps described by leadership, and further updates on who will be affected and on the implementation timeline are expected in coming communications from the company.
