Twitter founder Jack Dorsey announces 4,000 job cuts at Block

Jack Dorsey will cut more than 4,000 jobs at Block, reducing the fintech group’s workforce by nearly half, in one of the clearest signals yet of how artificial intelligence is reshaping corporate structures across the technology sector.

The Twitter co-founder announced the decision on Thursday, stating that the move was not driven by financial distress but by a fundamental shift in how companies are built and managed in the AI era.

Block, which owns payments platforms Square and Cash App, will shrink its headcount from more than 10,000 employees to just under 6,000.

In a lengthy post on X, Mr Dorsey said AI tools were enabling smaller and flatter teams to operate more effectively. “We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” he wrote.

The cuts come despite strong financial performance. Block reported gross profit of £7.7 billion last year, up 17% on the previous year. According to Reuters, investors welcomed the restructuring, sending shares up as much as 27% following the announcement.

The company expects to incur restructuring charges of up to £370 million as it implements the changes.

Employees affected by the layoffs will receive 20 weeks’ salary plus an additional week for each year of service. They will also receive equity vesting through the end of May and six months of healthcare coverage. Departing staff may keep their company devices and will be given £3,700 to support their transition.

Mr Dorsey defended the scale and speed of the move, arguing that incremental cuts would erode morale and weaken leadership credibility. “I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome,” he said.

He acknowledged that Block had expanded too rapidly during the pandemic, with its workforce rising from around 3,900 to 12,500 employees in just three years. However, he rejected suggestions that the current decision reflected mismanagement, writing that Block “run[s] an efficient company… better than most”.

The overhaul places Block among a growing list of technology companies reshaping their labour models around AI. Reuters has reported that Amazon cut tens of thousands of roles while ramping up AI investment, while Meta, Microsoft and Google have also reduced headcount as they pivot towards automation and machine learning.

Stephen Innes of SPI Asset Management told Reuters that Mr Dorsey had publicly articulated what many executives have discussed privately: that AI is altering the economics of running a business. The Block decision, he suggested, offers a high-profile case study in that shift.

For now, markets appear convinced. The longer-term test will be whether a leaner, AI-driven structure can sustain growth at Square and Cash App without eroding innovation or customer trust in an increasingly competitive fintech landscape.