Jack Dorsey, the co-founder of Twitter, is planning to lay off over 4,000 employees at his financial technology firm, Block, which will reduce the workforce by nearly half. He described this move as essential for transitioning towards “intelligence tools.”
In a letter to shareholders, Dorsey indicated that the staff count would drop from 10,205 to just under 600.
The company anticipates restructuring costs to range from approximately $450 million to $500 million.
In a notable warning for the job market, Dorsey predicted that many others might follow this trend “within the next year” due to technological advancements.
He expressed a belief that most companies would likely reach similar conclusions and implement structural changes.
“We would prefer to approach these changes proactively rather than waiting to be compelled to do so,” he remarked.
Dorsey expressed confidence in Cash App’s capability to sustain strong gross margin growth and expects Square’s total payment volume to continue accelerating over the next three years.
In a message on the social media platform X (previously Twitter), he emphasized the need for decisive action, noting that “repeated cuts destroy morale, focus, and confidence among customers and shareholders.”
The layoffs were announced alongside the company’s earnings call, where Block reported fourth-quarter sales of $6.25 billion, with profits marking a 24% increase to $2.87 billion compared to last year.
The company stated that it would allocate between $450 million and $500 million for employee severance benefits.
The affected employees will receive 20 weeks of pay, plus an additional week of pay for each year of service, stock that will vest until the end of May, six months of health insurance, company devices, and a $5,000 transition allowance.
Workers outside the U.S. will receive comparable support according to local laws.
