Block Lays Off 4,000 Employees, Citing AI Efficiency Gains

BANGKOK -- Shares in the financial technology company Block soared more than 20% in premarket trading Friday after its CEO announced it was laying off more than 4,000 of its 10,000 plus employees, reconfiguring to capitalize on its use of artificial intelligence. "The core thesis is simple.

Intelligence tools have changed what it means to build and run a company," Jack Dorsey said in a letter to shareholders in Block, the parent company to online payment platforms such as Square and Cash App. "A significantly smaller team, using the tools we're building, can do more and do it better," he said.

Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded. The assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said. Block's shares gained 5% Thursday to $54.53, before it reported its earnings.

They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier. "For years, we have debated whether AI would dent jobs at the margin.