Block says AI helped drive layoffs of more than 4,000 workers

In short: Block said it is laying off more than 4,000 employees, and it pointed to AI tools as one reason it can run the business with fewer people.

What happened

Block, a financial services company that owns Square, Cash App, and Afterpay, announced in late February 2026 that it would cut more than 4,000 jobs. That is nearly 40% of its workforce. The company said it expects to go from about 10,000 employees to a little over 6,000 by the end of the second quarter of its 2026 fiscal year.

CEO Jack Dorsey said the move was strategic, not a response to a sudden financial crisis. He argued that the “intelligence tools” the company is building and using, along with smaller teams, are changing how the company works. In simple terms, Block is saying some tasks can now be done faster or with fewer people because software can handle more of the routine work (like having a very fast assistant that can draft, summarize, and check things).

After the announcement, Block’s stock rose more than 23% in after-hours trading. Block also reported strong results for 2025, including gross profit of more than $10 billion, up 17% from the year before. Even while cutting jobs, Block said it still plans to hire in certain areas, including senior AI engineering roles and sales and marketing.

Why it matters

This is a high-profile example of a company publicly linking job cuts to AI. It adds to a growing debate about whether AI is truly replacing parts of jobs, or whether companies are mainly using AI as a reason to reduce costs. For workers and customers, the big question is whether services stay the same, improve, or get worse as companies try to do more with fewer employees.

Source: NYTimes