Block cut 40 percent of its jobs on Feb. 26, 2026. Jack Dorsey, the company's co-founder and chief executive, said AI tools made the smaller team possible1. He broke the news in a letter attached to a securities filing, then posted it himself on X2.
Square, Cash App and Afterpay all sit inside Block, the company Dorsey leads. Dorsey and Jim McKelvey started Square in May 2009, before renaming the whole company Block on Dec. 10, 20218. The rename landed the same year Block's headcount began the fastest growth in its history.
Block employed more than 10,000 people before the cut1. Afterward it kept just under 6,000, about 5,900 by Dorsey's own rounded count.
Dorsey told shareholders the business stayed strong1. Gross profit and margins both kept improving. "But something has changed," he wrote.
Block Cuts 40 Percent of Its Staff in One Announcement
Share of Block's roughly 10,000-person staff cut in the Feb. 26, 2026 restructuring, by Dorsey's own rounded count
Dorsey's letter rounds to "over 10,000" and "just under 6,000" in place of exact counts; this chart uses his own 40 percent figure.
Sources: Block, Inc. via SEC EDGAR [1]; Jack Dorsey on X [2]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Item | Value |
|---|---|
| Jobs cut | 40% |
| Whole | 100% |
What Block Actually Cut
Block asked more than 4,000 people to leave or enter consultation, Dorsey's letter said1. Consultation is Block's own term: a formal notice period some countries require before a layoff takes effect. Each departing employee keeps salary for 20 weeks, plus one week for every year worked. Equity keeps vesting through the end of May, and health coverage runs six months longer2.
Dorsey framed his choice as two paths. One was to cut jobs slowly, across months or years, as AI tools kept improving. He chose the other path: act once, now, in the open. "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 wrote2.
He also promised a live video call that same afternoon, to thank departing staff directly. Internal channels stayed open through Thursday evening, so colleagues could say goodbye.
jack@jackwe're making @blocks smaller today. here's my note to the company.
####
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…
Block's stock jumped about 24 percent in after-hours trading once the news broke6. Part of that jump came from something else. Block also raised its guidance for the first quarter of 2026.
It projected gross profit of $2.80 billion against a Wall Street estimate of $2.72 billion. Investors cheered a profit beat the same hour they learned about the cut.
Why Dorsey Blames AI
"Intelligence tools have changed what it means to build and run a company," Dorsey wrote. "A significantly smaller team, using the tools we're building, can do more and do it better"1.
Block's chief financial and operating officer, Amrita Ahuja, put a number on the claim4. She called the shift a two-year project, planned long before the announcement. Engineers at Block have increased their use of AI coding tools by 40 percent since September, she told Fortune. She measured that by how often engineers push code and features into production.
She named one concrete example: a risk-underwriting model once took a full financial quarter to build. It now finishes in a fraction of that time, Ahuja told Fortune. Block built it with Goose, an open-source AI agent the company has run inside its own systems for about 18 months.
"We believe that it is actually from a position of strength that we have the ability to take an action like this," Ahuja said.
Dorsey told customers they would feel the shift too. Block plans to let them build their own features directly from its tools. The new features would run through interfaces Block controls, skipping requests to its own engineers2.
The Hiring Boom That Came Before
Block's staff reached 10,000 only after years of growth, from 8,521 people at the end of 20217. It grew quickly: 12,428 workers by the end of 2022, then a peak of 12,985 at the end of 2023.
Block's Staff Grows to 12,985, Then Falls to 5,900
Block's full-time employees at year end, 2021 to 2025, and its own rounded post-cut figure for February 2026
Each column is Block's reported headcount at the end of that year; the last column is Dorsey's own rounded figure for the roughly 5,900 employees left after the cut, marked as an estimate.
The 2026 column rounds Dorsey's own "just under 6,000" to 5,900; every earlier column is Block's reported year-end headcount.
Sources: Block, Inc. via SEC EDGAR [1]; StockAnalysis.com [7]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Item | Value |
|---|---|
| 2021 | 8,521 |
| 2022 | 12,428 |
| 2023 | 12,985 |
| 2024 | 11,372 |
| 2025 | 10,205 |
| 2026 (estimate) | 5,900 |
Headcount kept dropping before Dorsey's AI letter arrived. It fell to 11,372 by the end of 2024, then to 10,205 by the end of 20257. The cut Dorsey announced in February takes Block below the 8,521 people it had in 2021, before that growth even started.
The Case Against the AI Story
Ethan Mollick studies AI and management at the University of Pennsylvania's Wharton School. He questioned Block's own math. "Given that effective AI tools are very new, and we have little sense of how to organize work around them, it is hard to imagine a firm-wide sudden 50%+ efficiency gain that justifies massive organizational cuts," he said3.
Wall Street read the cut with a similar split. Analysts at Piper Sandler described the size of the cut as an extreme step. They still raised their own forecast for Block's profit this year5. The Piper Sandler note stayed skeptical of Block's longer-term growth, separate from the quarter it just raised.
A boom-era hiring spree offers its own reason for a cut. That reason skips AI entirely.
Block's own numbers leave room for both readings. The company added nearly 4,500 jobs between 2021 and 2023, more than it has now cut. Dorsey's letter mixes both reasons together.
The letter skips how much of the 40 percent reverses old hiring. It leaves out how much reflects new work a tool like Goose now does.
What to do
A recruiter or hiring manager should split Block's letter into two claims. Treat them separately. One claim is about cost control: Block grew fast, then corrected it. The other is a productivity claim: specific AI tools, in production for 18 months, now do work that once needed more people.
Weigh which claim a company makes before it cuts staff. A company can show its own before-and-after task data, the way Ahuja described one risk model. Showing that data argues something different than naming AI in general terms.
By the numbers
- 40 percent: the share of jobs cut in Block's Feb. 26, 2026 restructuring, by Dorsey's own account1.
- 12,985: Block's peak full-time headcount, reached Dec. 31, 20237.
- 10,205: full-time employees on the payroll right before the cut, Dec. 31, 20257.
- 24 percent: how much the stock rose in after-hours trading the day of the announcement6.
- 18 months: the time Goose, Block's internal AI agent, has run inside the company, per its CFO4.
- 20 weeks: base severance paid to departing staff, plus a week per year of tenure2.
What to watch
Block's next earnings call should link Goose to a specific, measured task. Other large employers citing Dorsey's reasoning within his one-year window would confirm the pattern. A headcount that keeps falling past 6,000 would weaken the overhiring story and strengthen the AI one.
Sources
- Jack Dorsey, "Letter to Shareholders" (Exhibit 99.1 to Form 8-K), Block, Inc. via SEC EDGAR, Feb. 26, 2026, https://www.sec.gov/Archives/edgar/data/1512673/000119312526076557/d108590dex991.htm
- Jack Dorsey (@jack), "we're making @blocks smaller today. here's my note to the company.", X, Feb. 26, 2026, https://x.com/jack/status/2027129697092731343
- Jacob Clemente, "AI made him do it: Jack Dorsey lays off 40% of Block staff," The San Francisco Standard, Feb. 26, 2026, https://sfstandard.com/2026/02/26/block-lays-off-staff/
- Sheryl Estrada, "Exclusive: Block's CFO explains the AI leaps over 18 months that led to the decision to slash nearly half its workforce," Fortune, March 6, 2026, https://fortune.com/2026/03/06/exclusive-block-cfo-ai-leaps-18-months-led-decision-slash-nearly-half-its-workforce
- MacKenzie Sigalos, "Jack Dorsey made the loudest case yet that AI is already replacing jobs," CNBC, Feb. 27, 2026, https://www.cnbc.com/2026/02/27/jack-dorsey-made-the-loudest-case-yet-ai-is-already-replacing-jobs.html
- Vince Condarcuri, "Block Stock (XYZ) Skyrockets after Announcing Plans to Cut 40% of Workforce," TipRanks, Feb. 26, 2026, https://www.tipranks.com/news/block-stock-xyz-skyrockets-after-announcing-plans-to-cut-40-of-workforce
- StockAnalysis.com, "Block (XYZ) Number of Employees," accessed Nov. 13, 2026, https://stockanalysis.com/stocks/xyz/employees/
- Wikipedia contributors, "Block, Inc.," Wikipedia, accessed Nov. 13, 2026, https://en.wikipedia.org/wiki/Block,_Inc.
