Why Jack Dorsey's Block Cut 50% of the Workforce in 1 Month?

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Dorsey is laying off half of his Block employees, as the company invests more in AI tools and agents.

All Block Layoffs in 2026 Explained

Just a few days ago, on February 9, Block was planning to cut 10% of its workforce through annual performance reviews. 

We thought that was it for this year, but the real shock came when the company announced a much larger wave of layoffs. 

In February 2026, in a letter to shareholders, CEO Jack Dorsey confirmed that Block is cutting over 4,000 jobs as it rapidly moves to center its operations around AI.

AI had one victim, and the layoff count for 2026 is increasing each day.

Block Inc., the financial technology giant behind Square, Cash App, and Tidal. Its biggest asset is CEO Dorsey, best known as the co-founder of Twitter, which was renamed X after being bought by Elon Musk. After leaving Twitter, Dorsey started building Block and entered the fintech space.

The headcount has decreased from over 10,000 employees to fewer than 6,000.

Dorsey said in the letter:

“Today, we shared a difficult decision with our team. We're reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or are entering into consultation.”

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This is no small cut. It is removing nearly half of its workforce in one major move. Employees have already been notified and are going through the official process, including deciding notice periods and severance discussions.

Update: Just a few days after, Block quietly rehired a small number of employees, suggesting some layoffs may have gone too far. A few cases involved errors or internal pushback, highlighting efforts to correct.

The Reason is AI, and Others will Follow

Dorsey didn’t hide behind corporate speak.

He acknowledged he had two choices:

1. Cut gradually over months or years
2. Or act decisively now. 

He chose the latter, arguing that dragging the process out destroys morale and trust from customers.

His most striking prediction came during Block’s earnings call with analysts:

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

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That is a bold claim.

He believes other companies are behind and will soon realize the same thing. So, many other companies will also cut jobs and restructure as they shift toward AI. 

The main reason behind these layoffs at Block is AI. AI tools have become powerful enough that smaller teams can now handle tasks that previously required many more people.

Dorsey explained:

“The core thesis is simple. 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. And intelligence tool capabilities are compounding faster every week.”

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This means Block no longer needs as large a workforce to build products or manage operations. 

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It also highlights that Block sees AI as central to its future. Instead of hiring more employees as the company grows, Block plans to rely more on AI tools to increase efficiency. 

Block deployed its open-source AI agent called Goose to all 12,000 engineers last year, and they reported time savings of 8 to 10 hours per week each. 

This isn’t the first time Block has reduced its workforce. 

The company has been steadily cutting jobs over the past two years as it restructures its business and shifts its priorities. In January 2024, Block announced plans to cap its workforce at 12,000 employees after realizing its hiring had grown faster than its revenue. 

This marked the beginning of its effort to control costs and improve efficiency. 

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Later in November 2024, Block laid off employees across its Tidal, TBD, and Square divisions as it redirected investments toward cryptocurrency. 

Then, in March 2025, the company cut 931 jobs during a major internal reorganization. This move also included removing around 200 managers from leadership roles and closing hundreds of open positions, as Block tried to simplify its structure. 

Altogether, these layoffs add up to nearly 7,000 job losses in just over 3 years. Block went from 13,000 in 2023 to 6,000 in 2026. 

The current restructuring itself will cost Block between $450 million and $500 million in one-time charges.

Still, whether it is a case of AI-washing as Sam Altman hinted, or a real threat of AI, we will have to see. Dorsey made it clear that the layoffs are not happening because the company is failing. In fact, its business is growing.  

Still, people are complaining that his business was bloated, and they are using AI as a cop out. Some are also accusing companies like Block of shifting jobs overseas instead of truly eliminating the work.

Bottom Line

The company is making more money than ever. So, these layoffs are not about survival. They are about running leaner, using AI to replace the work that humans used to do.

At least, for the laid-off employees, he is offering 20 weeks of base pay, equity,  6 months of healthcare, and some cash too. Employees outside the U.S. were told they would receive the same. Still, their careers and financial security have been upended.