4,000 Jobs Gone — So Why Does The Market Love It?

Block, the parent company of Cash App and Square, announced Thursday it will be laying off more than 4,000 employees — a move that sent the company’s stock up 25% in after-hours trading.

For most companies, laying off nearly half the workforce would send stockholders into a panic, tanking the stock within minutes of the announcement. But in 2026, investors in Block appear to have the opposite perspective — viewing humans as a liability in the modern economy, thanks in large part to the AI revolution.

Block CEO Jack Dorsey said in a statement on X that the layoffs did not happen “because we’re in trouble,” but rather because “something has changed.”

“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company [sic]. and that’s accelerating rapidly,” Dorsey said.

Dorsey viewed job cuts resulting from AI implementation as inevitable and chose to rip off the band-aid.

“i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now [sic]. i chose the latter,” Dorsey said. “repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead [sic].”

The layoffs are part of a broader shakeout in tech, where companies including Salesforce, CrowdStrike, Pinterest, and Chegg are shedding workers as AI absorbs key functions.

In a letter to shareholders, Dorsey predicted that, within the next year, “the majority of companies will reach the same conclusion and make similar structural changes.”

Block’s Q4 numbers were otherwise in the green, with gross profit increasing 24% year-over-year. Block CFO Amrita Ahuja told investors that the cuts are necessary “for our next phase of long-term growth.”

“We are choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work,” Ahuja said.