Mikkel Christensen
Financial technology company Block is cutting 4,000 jobs as it shifts more of its operations toward artificial intelligence tools that executives say can outperform larger teams.
Financial technology company Block is cutting 4,000 jobs as it shifts more of its operations toward artificial intelligence tools that executives say can outperform larger teams.
The move, announced alongside its latest earnings update, triggered a sharp rise in the company’s share price.
major workforce reduction
Block, which employs more than 10,000 people, will eliminate 4,000 roles as part of a restructuring aimed at integrating more AI across the business, according to reporting by the Daily Mirror citing The Associated Press.
In a letter to shareholders, CEO Jack Dorsey described the change as a fundamental rethink of how companies are built and managed.
“The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” Dorsey wrote.
He added: “A significantly smaller team, using the tools we’re building, can do more and do it better.”
markets respond positively
Investors welcomed the cost-cutting strategy. Shares in the San Francisco-based company jumped more than 20% in premarket trading Friday, Feb. 27, the Mirror reported, citing AP.
The stock had already gained 5% to close at $54.53 before fourth-quarter earnings were released, then climbed to nearly $69 in after-hours trading.
Analysts said expectations that AI-led efficiencies could boost profitability helped drive the surge.
profits and uncertainty
Block, the parent company of Square and Cash App, reported a 24% rise in fourth-quarter gross profit compared with a year earlier.
It remains unclear which departments or regions will be affected across the company’s operations in the United States, Canada, parts of Europe, Australia and Japan.
Stephen Innes of SPI Asset Management said the announcement underscores a turning point in the debate over automation and employment.
“For years, we have debated whether AI would dent jobs at the margin. Now we have a public case study in which the CEO explicitly says that intelligence tools have changed what it means to build and run a company,” he said.
Sources: Daily Mirror, The Associated Press
