The financial services firm Block (XYZ) is surging in after-hours trading after CEO and co-founder Jack Dorsey announced that the firm is slashing its workforce by nearly half.
In an announcement on X, Dorsey says the company is making one of its hardest decisions in history.
“We’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. That means over 4,000 of you are being asked to leave or entering into consultation.”
Dorsey says that while the big decision carries risk, he notes that the firm made a full review of the roles and the people needed for growth. He also highlights that Block is strong and not in trouble, but AI tools are changing the way the business operates.
“We continue to serve more and more customers, and profitability is improving. 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.”
For those impacted by the decision, Dorsey says the firm is prepared to dole out a very generous severance package.
“You’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of May, six 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 US, you’ll receive similar support but exact details are going to vary based on local requirements).”
News of the layoffs sent XYZ shares flying in after-hours trading, soaring 20% to $65.89.
Earlier this week, Citrini Research laid out a scenario in which AI triggers a wave of job displacement that propelled the US unemployment rate to 10.2% in 2028.
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