Block (XYZ) shares surged more than 22% in extended trading after Jack Dorsey announced the payments company would lay off nearly half of its staff as part of a major bet in artificial intelligence that came alongside the release of its fourth quarter earnings report.
“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 being asked to leave or entering into consultation,” Dorsey wrote in a post on X.
“Something has changed,” Dorsey wrote, framing the decision as a risk intended to position the company for long-term growth. He cited new artificial intelligence tools that can automate work as the reason for the shift, noting that AI is “enabling a new way of working which fundamentally changes what it means to build and run a company.”
In the fourth quarter, Block reported adjusted earnings per share of $0.65, in line with Wall Street estimates. Revenue of $6.25 billion slightly beat expectations of $6.21 billion, according to S&P Global Market Intelligence.
Block also raised its full-year guidance. The company, which supports the CashApp and Square platforms, said it expects gross profit growth of 18% year over year in 2026 and adjusted operating income of $3.20 billion or 26% margin.