Payments technology company Block will lay off almost half its workforce in favour of artificial intelligence tools, sending shares up 23%.
Its headcount will be cut from over 10,000 employees to just under 6,000, according to CEO Jack Dorsey.
“Intelligence tools have changed what it means to build and run a company. We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better,” wrote Dorsey in a letter to shareholders.
“We believe Block will be significantly more valuable as a smaller, faster, intelligence-native company. Everything we do from here is in service of that.”
U.S. employees who have been laid off will receive their salaries for at least 20 weeks and an additional US$5,000, with employees in other countries given an equivalent based on local requirements.
Around 70% of businesses actively use AI, per a study this month by the National Bureau of Economic Research that surveyed executives in the U.S, United Kingdom, Australia, and Germany. Almost 90% reported AI had no impact on labour productivity over the past three years, however.
Block’s fourth quarter earnings, also released today, saw the company raise its guidance following strong profit growth. Gross profits were up 24% year-over-year to $2.87 billion, and adjusted operating income climbed 20% to $588 million.
Revenue rose from $6.03 billion one year ago to $6.25 billion. Square’s gross payment volume increased 10%.
Its guidance projects $12.20 billion in gross profit across 2026, and adjusted operating income of $3.20 billion.
Block (NYSE: XYZ) shares closed 5% higher at $54.53, and soared a further 23.4% in after-hours trading. Its Australia-listed shares (ASX: XYZ) were also trading 28.2% higher at the time of writing. Block’s market capitalisation is $31.56 billion.
