Fintech company Block, led by Jack Dorsey, announced layoffs affecting over 4,000 of its 10,000 employees—nearly half its workforce—explicitly due to AI tools enabling smaller teams to do more. Despite strong 2025 financials marred by bitcoin losses, shares rose 20-25% on market approval, amid growing AI-driven job cut fears.
Block, the payments firm formerly known as Square and founded by Twitter co-founder Jack Dorsey, revealed on February 27, 2026, plans to cut nearly half its workforce, impacting more than 4,000 positions. In a shareholder letter, Dorsey stated, 'AI tools have changed what it means to build and run a company today. A significantly smaller team, using the tools we’re building, can do more and do it better.' He predicted most companies are late to AI's employment impact and would follow suit soon.
The move follows strong 2025 performance, with Q4 revenue at $6.3 billion meeting expectations, though earnings dropped to 19 cents per share due to a $234 million bitcoin loss amid a 23% crypto price drop. Block emphasizes bitcoin over competitors' stablecoins.
Shares surged 20-25% post-announcement, signaling investor support. This came days after Citrini Research's February 22 report on AI's economic effects through 2028, triggering a February 23 market plunge: IBM lost $31 billion in value (-13%, worst since 2000), with hits to SAP, Accenture, Indian IT, delivery, transport, and finance sectors.
Citrini highlighted AI automating complex tasks like project management, reports, legal/accounting analysis, programming, and design—potentially creating 'ghost GDP' where output grows but labor's GDP share falls from 56% to 46%, boosting corporate profits. Nvidia's value rose over 600% in three years on AI chips, while Amazon, Google, Microsoft, and Apple gain from services, but broader adoption lags per the 'Solow paradox' (1980s computers). A Goldman Sachs report cut software growth forecasts to 5-10% annually, deeming ChatGPT not yet a general-purpose technology.
The layoffs align with trends: Amazon (30,000 cuts since October), UPS, Dow, Nike, and Home Depot announced 52,000 combined jobs lost in late January. Amazon's Andy Jassy warned AI could reduce white-collar roles. Despite concerns, recent US payrolls show job market stabilization.
