“In September, payments firm Block Inc. gathered 8,000 of its employees from around the globe to California for an extravaganza celebrating the company's 16th birthday.
The three-day affair took place at the Oakland Coliseum and Arena and had the air of a music festival rather than a corporate event, with a nighttime DJ set by Anderson .Paak.
Among the highlights: Block founder Jack Dorsey, clad in a black T-shirt with a chain necklace, held a chat on stage with hip-hop superstar Jay-Z, a Block board member. The event cost the company over $60 million.
Six months later, Dorsey announced plans to slash 40% of the workforce at the company, which owns Square and Cash App. More than 4,000 people were soon notified that they would be let go.
Dorsey, 49 years old, cited rapidly improving artificial-intelligence models as the primary reason, fueling anxieties the technology was on the verge of wiping out white-collar jobs and devastating the economy. Just days earlier, a report that imagined such a future had sparked a market rout.
"Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," Dorsey said on a call with analysts as Block's stock soared.
Not everyone is buying it. Rather than leading American corporations into a brave new future, some analysts say, he is capitalizing on a chance to slash costs at a company with excessive staffing.
What began as a company focused on card-payment systems expanded into buy-now, pay-later loans, Jay-Z's music-streaming platform and bitcoin investments. The company has improved the profitability of its core businesses, but some of its ventures are weighing on its balance sheet. Net income in 2025 fell by more than half from the prior year as a result of a one-time tax gain in 2024.
"The vast majority of these cuts were probably not due to AI," said Dan Dolev of Mizuho Americas, noting the "significant amount of bloating" in recent years.
"This isn't an AI story. It's a workforce correction wearing an AI costume," wrote Jason Karsh, a former Block employee, on X.
Inside Block, employees had already grown accustomed to layoffs -- just not on this scale.
Block had gone on a hiring spree during the pandemic, when Dorsey -- who was known for a hands-off leadership style -- became even more absent.
Dorsey's lieutenants often clashed in his absence, leading to teams with duplicated roles and resources. The company had around 4,000 employees at the end of 2019. By the end of 2023, head count had mushroomed to nearly 13,000.
A series of missteps -- including a global outage at Square -- prompted Dorsey to take on a more active role at the company. He announced a large round of layoffs in late 2023 and then again in early 2025. When Dorsey announced the 40% reduction last week, Block still had around 10,000 employees.
Dorsey has maintained that the latest cuts weren't primarily motivated by cost savings. He acknowledged in a post on X that he had "incorrectly" built two separate business structures, but that Block's hiring partly reflected the increased complexity of the company's operations.
Block is Dorsey's second stint atop a tech company. The young programmer, sporting dreadlocks and a nose ring at the time, was one of Twitter's co-founders and served as its chief executive officer until 2008, when he was pushed out amid concerns that he was distracted by his hobbies. In interviews, Dorsey has said he was ousted because he "deferred too much" to other executives.
Soon after, in 2009, he co-founded Square, the company that would go on to become Block. The idea came about after another co-founder, a coder and glassblowing artist named Jim McKelvey, couldn't sell one of his sculptural glass faucets because he couldn't accept credit cards.
To solve the problem, they created a square-shaped device that could plug into a smartphone's headphone jack and read credit cards. The company gave away the hardware and software and the system took off, particularly among small businesses.
When employees came up with the idea for Cash App in late 2012, executives wanted to kill the project in part because it felt too similar to PayPal's Venmo. Dorsey has said he kept it alive because he trusted the team leading it.
In 2015, Square prepared to go public. That same year, Dorsey took back the job as CEO of Twitter, which was based a block away. He juggled roles at both companies and started delegating more work at Square to his deputies.
Dorsey left Twitter's leadership shortly before it was acquired in 2022 by billionaire Elon Musk.
Dorsey stepped back in as Square's full-time CEO after a global service outage in September 2023 left business owners unable to access their accounts for two days.
Rolling layoffs began soon after. Dorsey doubled down on his interest in bitcoin and announced Bitkey, a hardware bitcoin wallet device. A unit to make chips and machines for bitcoin mining soon followed.
Today, both of Block's major business units are facing pressure. Square is competing with payment platforms including Shopify and Toast, while Cash App competes with players including Apple's wallet and PayPal's Venmo.
In the past year, Dorsey has pushed his employees to use generative AI tools, according to people familiar with the matter. Employees are also expected to send Dorsey weekly updates, which he then summarizes with AI into general highlights and themes, the people said.
The depth of the layoffs announced last week were shocking to many employees. Others found solace in getting closure.
"For the past six months, the vibe at Block has been heavy with anxiety, and layoffs have been the hottest topic," Cash App engineer Zane Wang wrote in a LinkedIn post shortly after he was laid off. "Honestly, getting laid off feels more like a relief."” [1]
1. Skeptics Doubt AI Caused Block's Layoffs. Au-Yeung, Angel. Wall Street Journal, Eastern edition; New York, N.Y.. 04 Mar 2026: B1.
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