Jack Dorsey just drew a line in the sand — and Wall Street threw a parade.
Block, the parent company of Square, Cash App, and Afterpay, announced Thursday it’s slashing its workforce from over 10,000 to just under 6,000. That’s more than 4,000 people shown the door in a single stroke. The reason? “Intelligence tools,” Dorsey wrote in a shareholder letter. In plain English: AI can do their jobs now.
The stock promptly exploded 24% in after-hours trading.
Let that sink in. A company fires nearly half its workforce and gets rewarded with one of its biggest single-day moves in history. That’s not cruelty — it’s the market telling you exactly where this is all headed.
The numbers back up the boldness. Block’s Q4 results were clean: adjusted EPS of 65 cents on $6.25 billion in revenue, both matching estimates. Gross profit surged 24% year-over-year to $2.87 billion. Full-year EPS guidance came in at $3.66, blowing past the $3.22 analysts expected. This isn’t a company cutting because it’s bleeding — it’s cutting because the math on AI-powered efficiency is too compelling to ignore.
CFO Amrita Ahuja framed it as a growth move: “We see an opportunity to move faster with smaller, highly talented teams using AI to automate more work.” The restructuring will cost $450 to $500 million in severance and related charges, mostly hitting Q1. A painful check to write — but if it means permanently lower headcount and fatter margins, that’s a one-time cost for a permanent upgrade.
What makes this especially notable is Dorsey’s prediction. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” he wrote on X. “I’d rather get there honestly and on our own terms than be forced into it reactively.”
He’s probably right. Amazon, Meta, Pinterest, CrowdStrike, and Chegg have all made AI-driven cuts recently. Block just did it louder and bigger than anyone else. And the timing is no accident — Anthropic’s recent Claude updates for enterprise tasks spooked the entire software sector just weeks ago, sending SaaS stocks into a tailspin.
The uncomfortable truth for workers is that Block had 3,835 employees at the end of 2019. It ballooned to over 10,000 during the pandemic hiring frenzy. Now it’s snapping back — not to pre-pandemic levels, but to a new AI-augmented reality where 6,000 people can do what 10,000 did before.
For investors, the message is clear: companies that aggressively adopt AI and ruthlessly cut bloat will be rewarded. Companies that drag their feet will be punished. Block just became the poster child for the first camp — and the stock price proves the market is paying attention.