Block Lays Off 40% of Staff Citing AI. CEO Dorsey Says Other Firms Will Make Similar Moves.

ETHReserveBank · 2026-02-27T17:48:54+00:00

Block plans to lay off over 4,000 employees, nearly half its workforce, amid the rise of AI, causing a surge in its stock. Jack Dorsey predicts further workforce reductions across tech companies as AI transforms business operations.

ETHReserveBank

2026-02-27 17:48:54

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Key Takeaways

Shares of Block surged Friday after the fintech company announced plans to lay off nearly half of its staff.
Almost 30,000 people across 45 tech companies have been laid off since the start of the year.

As artificial intelligence technology advances, more people are likely to lose their jobs, according to one high-profile tech CEO.

Jack Dorsey, chief of fintech shop Block (XYZ), delivered the foreboding message on Thursday after announcing the company will lay off more than 4,000 people, representing nearly half of its existing staff of 10,000. Block, which owns Square and Cash App, had a “strong year” in 2025, but the advances in artificial intelligence tools have “changed what it means to build and run a company,” Dorsey said in a shareholder letter published alongside its fourth-quarter earnings results.

Shares of Block were up 15% recently, after surging as much as 21% earlier in the session in response to the news.

The company, formerly called Square, is the latest tech firm to slash its headcount. Others including eBay (EBAY), Salesforce (CRM), Workday (WDAY), Zillow (Z) and Amazon (AMZN) have all announced job cuts in the last couple of months, with some citing AI as the primary driver. Dorsey said other companies are likely to make similar workforce decisions.

WHY THIS MATTERS TO YOU

AI-related layoffs have not abated, even though some company leaders including Klarna, have said it turned out to be a mistake.

“I don’t think we’re early to this realization. I think most companies are late,” he said. “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”

Dorsey, who famously founded social media platform Twitter, said AI tools were now at a state that could fundamentally transform how companies operate, and the firm would put AI at the core of how “the entire company works.” During the company’s earnings call, he said that its smaller, nimbler workforce would be better positioned to experiment and create new products faster, per a transcript provided by AlphaSense. Dorsey also said that the company may have “application gap” in its use of AI, but planned to use those tools more aggressively.

So far this year, almost 30,000 people across 45 tech companies have been handed their walking papers , according to data compiled by layoffs.fyi, which has been tracking job cuts since 2020. More than half of that represents Amazon’s layoffs, which last month announced it was reducing its workforce by 16,000 people.

Related Education

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Despite the big gain on Friday, shares of Block remain in negative territory in 2026.

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