Jack Dorsey’s Block has initiated a massive restructuring effort, cutting more than 4,000 jobs, roughly 40% of its workforce, in a pivot toward leaner, AI driven operations.
we'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…— jack (@jack) February 26, 2026
The decision sent Block (SQ) shares ripping 23% higher in after-hours trading, rising from $54.56 to $67.11 and signaling that Wall Street is aggressively pricing in the efficiency gains despite the carnage.
This is not just a cost-cutting measure; it is a structural overhaul of how a major fintech and crypto-adjacent company operates.
By slashing headcount from over 10,000 to under 6,000, Dorsey is betting that artificial intelligence tools can replace human density without sacrificing product velocity.
The move places Block’s Bitcoin-focused strategy on a leaner financial footing, directly challenging the bloated growth models of the last cycle.
Key Takeaways
- The Signal: Block is reducing staff by 40% to strictly leverage AI automation and flatten management structures.
- The Data: Wall Street reacted instantly, pushing SQ stock from $54.53 to nearly $69 (+24%) on efficiency hopes.
- The Outlook: Jack Dorsey predicts this is the start of an industry-wide trend where AI tools permanently displace headcount.
Block and the AI Pivot: What Actually Happened
Jack Dorsey did not mince words. In a tweeted letter to staff, the Block co-founder stated he had two options: bleed headcount slowly over the years or “be honest about where we are and act on it now.” He chose the latter.
we'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…— jack (@jack) February 26, 2026
The cuts are immediate. Affected employees, primarily in the U.S., will receive 20 weeks of severance pay plus one week for every year of tenure.
Despite the scale of the layoffs, the company beat expectations on earnings, reporting a 24% year-on-year increase in gross profit. This financial cushion allowed Dorsey to execute the pivot from a position of relative strength rather than desperation.
Dorsey explicitly cited the “rapid acceleration” of AI capabilities as the driver. “We’re already seeing that the intelligence tools we’re creating and using… enable a new way of working,” Dorsey wrote.
This echoes the sentiment seen in other crypto companies like Animoca, where AI agents and blockchain utility are becoming central to 2026 roadmaps.
The restructuring also mirrors the playbook Dorsey observed closely at X (formerly Twitter). After Elon Musk cut nearly 80% of Twitter’s staff, the platform remained operational, influencing Dorsey’s view on corporate bloat.
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What This Means for Block’s Bitcoin Strategy
For crypto investors, the key question is how this impacts Block’s massive Bitcoin bet. The answer lies in free cash flow. By removing 40% of salary overhead, Block is positioning itself to be a cash-generating machine, potentially freeing up more capital for its Bitcoin treasury strategy and ecosystem development.
The market reaction suggests investors see this as a bullish signal for the stock, separating Block from the broader retail exodus from crypto equities seen earlier this year.
While retail traders have been hesitant, institutional capital loves efficiency. The sharp rise in SQ price indicates that smart money believes AI can maintain the company’s growth trajectory with half the staff.
Is This a Trend? AI Restructuring Across Fintech
Dorsey’s prediction that “other companies will follow suit” should be taken seriously. We are witnessing a divergence in how Wall Street institutions and fintech firms approach growth. The era of hiring thousands of developers to solve linear problems is ending.
In 3 years from December 2019 to December 2022, Block $XYZ more than tripled its headcount from 3,900 to 12,500.
Unwinding less than half an insane COVID overhiring binge has much more to do with Jack Dorsey's managerial incompetence than whether AI is going to take your job. https://t.co/HVqa7ww13U— Will Slaughter (@BamaBonds) February 26, 2026
Data from Challenger, Gray & Christmas shows U.S. layoffs hit over 108,000 in January 2026, the highest since 2009. Block is simply the loudest signal yet that AI is no longer a buzzword for earnings calls, it is an active replacement for human labor in fintech.
If Block succeeds in maintaining revenue growth with a 6,000-person team, expect a wave of copycat restructuring across the crypto and payments sector throughout Q2 2026.
The signal to watch next is Block’s Q1 earnings in May: if margins expand without revenue decay, the AI restructuring thesis is validated.
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The post Jack Dorsey’s Block to Cut 4,000 Jobs in AI-Driven Restructuring appeared first on Cryptonews.
