Dual listed fintech Block (ASX: XYZ), the parent company of BNPL Afterpay and Square, will cut 4000 jobs – 40% of its workforce, within months, predicting artificial intelligence will deliver major productivity gains for the 6000 workers who remain.
Block shares popped more than 27% on the ASX and 23% in after market trade in the US following the news.
The cuts came as the company announced a 24% increase in its gross profit to US$2.87 billion in the final quarter of the 2025 calendar year.
Block also increased its 2026 guidance to 18% growth in gross profit to US$12.2 billion gross profit, with operation income at US$3.2 billion, as the margin rises to 26% margin thanks to an AI-driven operating model lifting profitability.
Cofounder and CEO Jack Dorsey delivered news of job losses in his letter to shareholders, adding that he expects most businesses to follow his lead.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” he said.
“I’d rather get there honestly and on our own terms than be forced into it reactively.”
Fundamental changes
Dorsey also posted on Twitter, now X, the social media platform he founded and used to own, saying Block was in a good financial position – although he was unable to buy a capital letter in his 637-word post.
” i’ll be straight about what’s happening, why, and what it means for everyone. first off, if you’re one of the people affected, you’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the U.S. you’ll receive similar support but exact details are going to vary based on local requirements),” he wrote.
“we’re not making this decision because we’re in trouble. our business is strong. gross profit continues to grow… but something has changed. we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”
Dorsey said he had two options: “cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now” saying he chose the latter because “repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. i’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome”.
The job losses at Block come two days after ASX-listed WiseTech (ASX-WTC) announced it would shed 2000 coding jobs from its 7000-strong workforce because of AI.
Block, then Square, acquired Afterpay in late 2021 in a $39 billion deal.
