Block Stock Rips Toward Best Day In 4 Years After Layoffs: Jack Dorsey Concedes Pandemic Over-Hiring

Mass layoffs have already ignited a debate over whether Block’s reset is AI-driven efficiency or a COVID hiring hangover.

Block, Inc. (XYZ) shares surged more than 22% in early premarket trading on Friday, putting the stock on pace for its best day since February 2022.

The rally followed the company’s decision to cut nearly half of its workforce of roughly 10,000 people. CEO Jack Dorsey said the move was enabled in part by “intelligence tools” that allow Block to operate more efficiently with a leaner team.

The announcement has already sparked debate online, with some questioning whether the cuts reflect AI-driven productivity gains or a reversal of pandemic-era overexpansion. Dorsey addressed the criticism directly on X, writing: “yes we over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024.”

He added that the company is now targeting more than $2 million in gross profit per employee, roughly four times its pre-COVID efficiency of about $500,000, which remained flat from 2019 through 2024. “We have and do run an efficient company… better than most,” he wrote.

Block's layoffs are expected to begin in the first quarter this year and conclude in the second. The company anticipates recording charges of $450 million to $500 million related to the reductions.

The workforce cuts came alongside fourth-quarter results that showed revenue of $6.25 billion, slightly ahead of analyst expectations, and a higher gross profit outlook for 2026. Still, the quarter marked Block’s first earnings beat in the past year, as the company navigates stiff competition from payments players including Fiserv, Inc., Shopify Inc. and Toast, Inc.

Block's stock has gained just a little over 1% so far this year.

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