Block, Inc. will cut more than 4,000 employees, reducing its workforce by nearly half as the company restructures around artificial intelligence and a leaner operating model.

The layoffs, announced Thursday in a shareholder letter, will shrink headcount from more than 10,000 to just under 6,000. Co-founder and CEO Jack Dorsey said the move reflects a shift in how the company builds products and runs teams as it integrates internal AI tools across the business.

“Today we’re making one of the hardest decisions in the history of our company,” Dorsey wrote in a note to employees. “We’re reducing our organization by nearly half.” He said the company considered making gradual cuts but opted for a single reduction to avoid prolonged uncertainty.

Block said affected employees will receive 20 weeks of salary plus one week per year of tenure, equity vested through the end of May, six months of health coverage, their corporate devices and $5,000 in transition support. International employees will receive similar packages based on local requirements.

Chief Financial Officer Amrita Ahuja said the company is acting from a position of strength and aims to move faster for customers. In its shareholder letter, Block pointed to gross profit growth that more than doubled from the first quarter to the fourth quarter of 2025.

Block’s shares are surging

Shares of Block trade under the ticker XYZ are up 25% aftermarket on the news. 

For the full year, Block reported gross profit of $10.36 billion, up 17% year over year. The company said it expects first-quarter operating income of $600 million, above a $574 million consensus estimate, and gross profit of $2.8 billion versus $2.72 billion expected. It also raised its full-year gross profit outlook and reported a beat on Cash App monthly active users.

Dorsey said internal “intelligence tools” are reshaping the company’s structure. Block has invested in AI systems, including a proprietary tool known as Goose, to automate workflows and increase productivity across engineering, customer service and operations.

“Intelligence tools have changed what it means to build and run a company,” Dorsey wrote in the shareholder letter. “A significantly smaller team, using the tools we’re building, can do more and do it better.”

Block, which operates Square, Cash App and lending products for consumers and merchants, has restructured since 2024 as its stock lagged peers in the financial technology sector.

The company has conducted rolling job cuts tied to performance reviews over the past two years.

Dorsey said the new structure will center on smaller, flatter teams built around AI-driven product development.

He acknowledged the scale of the reduction carries risk but said standing still would pose greater challenges as automation reshapes labor productivity across the technology industry.