Block Fires Half Its Workforce and the Stock Jumps 23% — Welcome to the AI Economy

Empty tech office with half the desks dark and a rising stock chart projected on the wall

Jack Dorsey's Block just announced it's laying off more than 4,000 employees — nearly half of its entire 10,000-person workforce. The stock immediately jumped 23%. If that doesn't tell you everything about how Wall Street values humans in 2026, nothing will.

What Happened

"We're reducing Block by nearly half, from over 10,000 people to just under 6,000," Dorsey wrote in a letter to shareholders. The reason? AI. Block's CFO Amrita Ahuja said the company is choosing to "shift how we operate... using AI to automate more work."

Dorsey was characteristically blunt: "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes." He said he'd rather act proactively than be forced into "repeated rounds of cuts" that destroy morale.

The Numbers

Despite gutting half its workforce, Block's business is actually accelerating:

  • Q4 adjusted EPS: 65 cents (met estimates)
  • Revenue: $6.25 billion (beat estimates)
  • Gross profit: up 24% year-over-year to $2.87 billion
  • Full-year 2026 EPS guidance: $3.66 vs. analyst estimate of $3.22
  • Restructuring charges: $450-500 million in severance and benefits

The stock (ticker: XYZ) surged more than 23% in after-hours trading. Wall Street loves efficiency, even when it comes at the cost of 4,000 livelihoods.

The Skeptical Take

Let's be clear about what's happening here. Dorsey isn't cutting because Block is struggling — gross profit is up 24%. He's cutting because he believes AI can do the work of 4,000 people, and the market is rewarding him for saying it out loud.

This is the new playbook: announce massive AI-driven layoffs, frame it as "getting ahead of the curve," watch your stock soar. Pinterest, CrowdStrike, and Chegg have all done versions of this recently. It's becoming a template.

But here's the uncomfortable question: can AI actually replace 4,000 employees at a payments company? Block isn't just a tech platform — it has Square merchants, Cash App users, customer support, compliance, and fraud detection at massive scale. Cutting half your workforce and hoping AI fills the gap is a bet, not a certainty.

Dorsey's prediction that "the majority of companies" will follow suit within a year is also worth scrutinizing. It's the kind of bold statement that sounds visionary if it comes true and reckless if it doesn't. And if it does come true, we're looking at a labor market disruption of historic proportions — one that no government or social safety net is prepared for.

The Bigger Picture

The most disturbing aspect isn't the layoffs themselves — it's the market's reaction. A 23% stock jump for firing half your workforce sends a clear signal to every CEO watching: the market will reward you for replacing humans with AI.

We're entering an era where a company's most "efficient" move is to eliminate as many human jobs as possible and let algorithms handle the rest. Whether that's sustainable — for companies, for workers, or for society — is a question nobody seems interested in asking while the stock price is going up.

The Bottom Line

Block's mass layoff is being celebrated as visionary leadership. But firing 4,000 people while posting record profits isn't innovation — it's a choice about who benefits from technological progress. Right now, the answer is shareholders, not workers. And Jack Dorsey just made that math very, very explicit.