Block shares rose more than 20% in pre-market trading after CEO Jack Dorsey told employees the company would cut more than 4,000 roles and reorganize around an “AI-era” operating model.
The cuts will reduce Block’s workforce from more than 10,000 to just under 6,000 (“nearly half,” in Dorsey’s words), and the company’s 8-K describes a “workforce plan” that will reduce its workforce by more than 40%.
Dorsey advocates for ‘AI era’ reset as investors consider cost reductions and growth goals
Block reported in its annual report that it had 10,205 full-time employees worldwide as of December 31, 2025. The company expects costs associated with this plan to be between $450 million and $500 million, with most of the costs to be recorded in the first quarter of fiscal 2026, and the plan to be substantially complete by the end of the second quarter.
Investors also reacted to what Mr. Block paired with the cuts. This is a positive framework that calls for gross profit to increase 18% year-on-year to $12.2 billion in 2026, and adjusted operating profit to $3.2 billion, an increase of 26%.
The letter states that 2025 gross profit will increase 17% year over year to $10.36 billion, fourth-quarter gross profit will increase 24% to $2.87 billion, Cash App will have $1.83 billion and Square will have $993 million. In trading, the block closed at $54.53 and traded around $69 in after-hours trading, up more than 20% in pre-market trading.
Dorsey’s internal message (shared publicly on X) sought to set a different tone for how the company would implement the cuts. He wrote that the process may feel more “awkward and human” than “efficient and cold,” and said the company would keep channels open for colleagues to say goodbye.
We’ll also be hosting a live video session to thank you all at 3:35pm PT. I think it might look awkward if you do it this way. I prefer things that are awkward and human to things that are efficient and cold.
To those who are leaving…I thank you and I am sorry for putting you through this.
The same memo lays out terms of severance that include 20 weeks of pay plus one extra week for each year of service, continued stock vesting through the end of May, six months of health care, permission to keep company devices, and $5,000 in transition support, although this varies outside the United States.
| item | metric | sauce |
|---|---|---|
| Personnel baseline | Full-time employees: 10,205 (as of December 31, 2025) | 10-K |
| Size of workforce planning | From over 10,000 to just under 6,000 (“almost half”). “40% or more” in the application | 8-K |
| Estimated price and timing | $450 million to $500 million, primarily in the first quarter of 2026. Substantially completed by end of second quarter of 2026 | 8-K |
| 2026 goals | Gross profit of $12.2 billion. Adjusted operating income $3.2 billion (26% margin) | shareholder letter |
| Retirement conditions (heading) | 20 weeks + 1 week per year. Capital until the end of May. 6 months health insurance. $5,000 support | jack |
The scope of the charges in the application also makes it easy to ascertain the scale of the reorganization beyond retirement.
If you divide $450 million to $500 million by the approximately 4,000 roles affected, you get approximately $112,000 to $125,000 per role. This total may include cash costs, benefits, and other items reflected in restructuring accounting.
What the reorganization suggests about block cost discipline and AI pivots
Block also urges the market to think of its “Intelligence Native” framework as an execution plan rather than a theme. In a letter to shareholders, the company described “intelligence” as part of how it makes decisions, manages risk, builds products and serves customers, and pointed to its “proactive intelligence” efforts and testing of Cash Apps, including Moneybot.
The bet behind the stock move is that the cost structure will be reset towards the company’s 2026 profit margin goals while maintaining product development speed and control with less labor, with the next quarter or two being the first testing period as rates land and the team is restructured.
The retrenchment framework is also impacting labor market data sets, where companies are increasingly citing AI alongside restructuring. Challenger, Gray & Christmas said in its January 2026 report that there were 108,435 job cuts in the U.S. in January 2026, an increase of 118% from the previous year, and that AI was cited for 7,624 job cuts, or about 7% of total job cuts for the month.
The company also tallied 54,836 layoff plans that cited AI in 2025, and wrote that the market appears to reward companies that mention AI.
A counter-argument has emerged that some companies may rely on AI branding while making cuts for broader reasons.
For crypto-oriented investors, Block’s stock narrative still includes volatility related to Bitcoin, even if the factor is headcount.
The company said it continues to ship proto-Bitcoin mining units and reported that its fourth quarter 2025 net income included a negative impact of $234 million from Bitcoin remeasurement (compared to a profit of $252 million in the same period last year).
Block also revealed that the company repurchased 11.9 million shares in the fourth quarter for $790 million, leaving $5.3 billion in authorized repurchases.
(Tag Translation)Bitcoin
