Block led by CEO Jack Dorsey has announced the most dramatic layoffs in the recent times. The company has slashed around 40% jobs which is nearly half of its workforce in a single round of layoffs. The company’s workforce has dropped from over 10,000 employees to just under 6,000. Speaking about the layoffs Dorsey said that he wanted to avoid repeated round of layoffs as it leads to morale damage and comes with prolonged uncertainty. “Repeated rounds of layoffs are destructive to morale, focus, and to the trust of customers and shareholders. I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome,” he wrote in a post on X.Dorsey framed the cuts as part of a broader shift toward leaner, AI-driven operations. “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,” he said. On Block’s earnings call, he predicted that more companies will follow suit, using AI to drive efficiency gains.Analysts noted that while the scale of Block’s layoffs is extreme, the severance packages offered were relatively generous. Georgetown University professor Brooks Holtom told Business Insider that one-time cuts may be less damaging than repeated rounds, though the sheer size of Block’s reduction is striking.
Read Jack Dorsey’s complete post on Block layoffs here
Today we’re making one of the hardest decisions in the history of our company: we’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation. i’ll be straight about what’s happening, why, and what it means for everyone.first off, if you’re one of the people affected, you’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the U.S. you’ll receive similar support but exact details are going to vary based on local requirements). i want you to know that before anything else. everyone will be notified today, whether you’re being asked to leave, entering consultation, or asked to stay.we’re not making this decision because we’re in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. 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.i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter. repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. i’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome. a smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures.a decision at this scale carries risk. but so does standing still. we’ve done a full review to determine the roles and people we require to reliably grow the business from here, and we’ve pressure-tested those decisions from multiple angles. i accept that we may have gotten some of them wrong, and we’ve built in flexibility to account for that, and do the right thing for our customers.we’re not going to just disappear people from slack and email and pretend they were never here. communication channels will stay open through thursday evening (pacific) so everyone can say goodbye properly, and share whatever you wish. i’ll also be hosting a live video session to thank everyone at 3:35pm pacific. i know doing it this way might feel awkward. i’d rather it feel awkward and human than efficient and cold.to those of you leaving…i’m grateful for you, and i’m sorry to put you through this. you built what this company is today. that’s a fact that i’ll honor forever. this decision is not a reflection of what you contributed. you will be a great contributor to any organization going forward.to those staying…i made this decision, and i’ll own it. what i’m asking of you is to build with me. we’re going to build this company with intelligence at the core of everything we do. how we work, how we create, how we serve our customers. our customers will feel this shift too, and we’re going to help them navigate it: towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces. that’s what i’m focused on now. expect a note from me tomorrow.jack
