A company cuts its workforce by 4,000 and the stock jumps 25%

Block Inc. Co-founded by Jack Dorsey of Twitter fame, announced that it is laying off more than 4,000 employees or nearly half of its workforce on Thursday, February 26. In response, the stock surged 25% in extended trading on Wall Street.

In a letter to shareholders, Dorsey wrote that the decision is a "difficult one" and that the workforce will be cut down from over 10,000 to just under 6,000. CFO Amrita Ahuja said that the move will position the company for the next phase of long-term growth.

As of December 31, 2025, filings show that Block had a total of 10,205 employees.

Dorsey wrote separately on "X" that the people affected will receive 20 weeks of salary plus one week per year of their tenure, equity vested through the end of May, six months of healthcare and corporate devices, along with $5,000 to help through this transition.

This entire layoff exercise will result in Block incurring charges of up to $500 million, consisting mostly of severance payments, employee benefits and non-cash expenses, which will reflect in the financials of the next quarter.

The Block Co-CEO further wrote that the decision is not being made because the company is in trouble or other such factors. "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," he wrote.

Other companies could also similarly overhaul their workforce as these "intelligence tools" bring more efficiency gains for them.

Block, the financial services provider, joined the list of companies such as Pinterest, CrowdStrike, and Chegg, who announced layoffs attributing it to AI reshaping their workforce.

The company announced the layoffs along with its fourth quarter results, that were largely in-line with expectations.

Block shares had ended 5% higher in extended trading.