Block Pivots to AI Strategy with 50% Workforce Reduction
San Francisco, Thursday, 26 February 2026.
As Block dismisses 4,000 employees to prioritize artificial intelligence, the market signaled strong approval, sending shares soaring over 20 percent despite the drastic personnel reduction.
A Structural Shift Toward Automation
On Thursday, Block Inc. (SQ) confirmed the departure of more than 4,000 staff members, a move that will shrink its organizational footprint from over 10,000 employees to just under 6,000 [2]. This decisive action, described by co-founder and CEO Jack Dorsey as a “difficult decision,” represents a fundamental restructuring of the fintech giant rather than a simple cost-cutting exercise [2]. By shedding nearly half of its headcount, the company aims to leverage artificial intelligence to automate workflows and enhance labor productivity [1].
Betting on ‘Goose’ and Efficiency
In a letter to shareholders, Dorsey and CFO Amrita Ahuja articulated a vision where smaller, high-talent teams utilize AI to accelerate growth [2]. The company explicitly pointed to the development of internal AI tools, including a system named “Goose,” as central to this new operational model [1]. This strategy bets heavily on the premise that artificial intelligence can effectively replace human capital in driving the future of labor productivity [1]. Ahuja noted that the company sees an opportunity to move faster by shifting how it operates during a period of accelerating business momentum [2].
Market Reaction and Financial Impact
Wall Street validated the strategy immediately, with shares skyrocketing more than 24 percent in extended trading following the announcement [2]. The layoffs coincided with the release of Block’s fourth-quarter earnings, where the company reported adjusted earnings per share of 65 cents on $6.25 billion in revenue, aligning closely with analyst expectations [2]. Looking ahead, the company projects full-year adjusted earnings per share of $3.66, surpassing analyst anticipations of $3.22 [2]. Despite the positive market reaction, the restructuring comes with a significant price tag; Block anticipates incurring charges between $450 million and $500 million, primarily related to severance and benefit costs to be recognized largely in the first quarter of 2026 [2].