Block CEO Jack Dorsey announced the layoff of nearly 4,000 employees as the company shifts to a "more compact, flat, and AI-focused" structure.

we're making @blocks smaller today. here's my note to the company.

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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…

— jack (@jack) February 26, 2026

Earlier in February, Bloomberg sources reported that the company was preparing to lay off up to 10% of its workforce.

According to Dorsey, artificial intelligence and related tools are fundamentally changing operational principles. Despite financial stability and gross profit growth, Block must restructure its business for long-term development.

“A decision of this magnitude carries risks, but inaction is also risky. We conducted a thorough analysis to determine the roles and people necessary for reliable growth,” he wrote.

Instead of gradual changes, Dorsey opted for an immediate layoff to avoid prolonged uncertainty. Affected employees will receive severance pay equivalent to 20 weeks of salary plus one week for each year of service.

In 2024, Block had already conducted significant layoffs affecting over 1,000 people.

After the main trading session closed at $54.53, the company's shares surged over 20% in after-hours trading, bringing its market capitalization to $31 billion.

Source: Yahoo Finance.

“We will build a company centered around intelligence. […] Our clients will also feel this shift, and we will help them adapt: aiming for a future where they can create their own functions directly using our capabilities and interfaces,” Dorsey concluded.

AI Becomes Essential

Silicon Valley IT corporations have shifted from recommending AI adoption to enforcing its use among employees. This was reported by WSJ.

“We use both carrots and sticks. The only way to thrive is for all employees to have a high level of AI proficiency,” noted Conductor CEO Seth Besmertnik.

According to a survey by consulting firm Section, 42% of tech sector professionals reported that their leaders expect the use of artificial intelligence in daily tasks, up from 32% eight months ago.

Nearly half of IT firms are already seeing positive returns on their investments in generative AI, compared to an average of 35% across other industries.

Industry giants are actively implementing systems to assess employees' AI skills:

  • Amazon Web Services tracks AI tool usage through specialized dashboards, which inform promotion decisions;
  • Google has begun using neural networks to evaluate the performance of software engineers;
  • Meta launched a system to monitor the amount of code written using algorithms, providing developers with analytics for self-assessment;
  • Microsoft included questions about AI usage in performance discussions, requiring employees to quantitatively assess their use of AI tools;
  • Salesforce added an AI proficiency tracker to its corporate dashboard, clearly stating that refusal to engage with new technologies is viewed as inefficiency.

Some companies no longer consider candidates without AI skills. Potential hires must demonstrate their ability to solve problems using AI and explain their choice of tools and prompts.

Notably, in February, OpenAI CEO Sam Altman stated that some companies are using artificial intelligence as a pretext for layoffs.