The decision was outlined in a shareholder letter and follows rolling job cuts previously tied to performance reviews. Dorsey told analysts that rapid advances in AI models over the past year convinced him that companies must rethink how they structure their workforces.

“I don’t think we’re early to this realization. I think most companies are late,” Dorsey said, predicting that many firms will make similar structural changes within the next year.

Block has invested heavily in internal AI tools, including its in-house system Goose, with the goal of applying AI across nearly every part of the business. Shares jumped as much as 21 percent after markets opened following the announcement.

The move comes as tech and fintech companies increasingly cite AI as a catalyst for shrinking headcounts. Some analysts question whether AI is fundamentally transforming operations or serving as justification for broader cost reductions.

Block’s stock has fallen about 40 percent since the start of 2025, despite reporting $10.36 billion in gross profit for the year, up 17 percent year over year. The company highlighted renewed growth in Cash App users, expanded lending products and rising Square payment volumes.

Dorsey said employees affected by the cuts will receive severance pay, six months of healthcare coverage and $5,000 in transition assistance. He described the restructuring as a proactive move to position Block as a leaner, AI-driven company prepared for the next phase of competition