Block

Block, co-founded by Jack Dorsey, is cutting its workforce by 40%, from over 10,000 to under 6,000 employees, attributing the move to the efficiency gains from AI tools. Dorsey stated the company’s core business remains strong, with gross profit growing and customer base expanding. Investors responded positively, with Block’s stock surging and its earnings forecast exceeding expectations. Analysts from Morgan Stanley and Goldman Sachs view the AI-driven efficiencies as a boost to profitability and productivity. The company expects restructuring costs of $450-$500 million.

Block, co-founded by Jack Dorsey, is laying off nearly half of its 10,000 employees to boost efficiency and leverage AI. CFO Amrita Ahuja cited a strategic shift towards smaller, AI-augmented teams for faster growth. Dorsey predicts similar structural changes across most companies within a year, challenging the narrative that AI will create more jobs than it displaces. This signals a potential paradigm shift in the future of work, demanding proactive discussions on new job creation and worker transition strategies.

At its first investor day since 2022, Block projected mid-teens annual gross profit growth over the next three years, targeting $15.8 billion by 2028. This aims to reassure investors after a 30% stock decline in 2025. Block forecasts adjusted operating income exceeding $4.6B and adjusted EPS reaching $5.50 by 2028. With diversified offerings and AI integration, the company emphasizes operational efficiency, a “rule of 40” investment framework, and a $5 billion share repurchase program.

Block’s (XYZ) shares fell nearly 8% after Q3 2025 earnings missed expectations. While revenue grew 2% year-over-year, Square’s gross profit growth slowed. Cash App saw robust growth, with gross profit up 24%. Block adjusted its full-year gross profit guidance upward. Despite increased net income, investors are concerned about Square’s slowing growth and competition. Block’s ability to regain momentum and improve profitability will be crucial.