Block, the fintech company founded by Twitter co-founder Jack Dorsey, is cutting nearly half of its workforce, citing the impact of artificial intelligence. The move, announced on February 26, 2026, will reduce headcount to less than 6,000 employees, down from 10,000, and signals a broader trend of tech companies reassessing staffing needs as AI capabilities expand.
Dorsey explained the decision in a letter to shareholders, stating that AI “fundamentally changes what it means to build and run a company.” He predicted that “within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”
The layoffs affect Square, CashApp, and Tidal, all owned by Block. Even as the company has undergone several rounds of job cuts since 2024, this is the first time AI has been explicitly cited as the primary driver. This decision underscores the growing influence of AI on the labor market and the potential for significant workforce adjustments across the technology sector.
The announcement comes amid a wave of similar actions by other tech giants. Amazon recently laid off 16,000 employees after previously cutting 14,000 roles, with CFO Brian Olsavsky noting the company is seeking cost reductions to fund increased AI spending. Meta, Microsoft, and Google have also implemented layoffs as they prioritize investments in AI. Meta’s co-founder and CEO, Mark Zuckerberg, anticipates “2026 to be the year that AI dramatically changes the way we work,” adding that projects previously requiring large teams are now being accomplished by single, highly skilled individuals.
Many tech companies are now utilizing AI tools, such as Claude Code from Anthropic and Codex from OpenAI, to automate software and website code creation. This automation of traditionally labor-intensive tasks has raised concerns about potential job displacement.
Despite the significant workforce reduction, Block’s stock price rose by 28% following the announcement, suggesting investor confidence in the company’s strategic shift. The company’s fourth-quarter earnings also exceeded expectations, with a reported earnings per share of $0.01, although revenue fell short of forecasts.
