Stock prices for financial technology firm Block jumped more than 20% during after-hours trading Thursday following CEO Jack Dorsey’s announcement that the company would eliminate over 4,000 positions from its approximately 10,000-person workforce, crediting artificial intelligence advancements for the decision.
In a shareholder letter for Block, which serves as the parent company for Square and CashApp, Dorsey explained his reasoning. “The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” Dorsey wrote. “A significantly smaller team, using the tools we’re building, can do more and do it better,” he stated.
Dorsey also shared his comments about AI being a primary factor in the workforce reduction on X, the social media platform formerly known as Twitter that he helped create.
Market analysts noted that investor confidence surged based on Block’s claims that the workforce reduction would boost both profitability and operational efficiency.
Block’s stock value increased 5% on Thursday, reaching $54.53 before the company released its quarterly results. During after-hours trading, shares climbed to nearly $69. The mobile payment company announced that its fourth-quarter gross profit increased 24% compared to the same period last year.
While overall employment terminations by U.S. corporations remain at reasonably stable levels, Block’s workforce reduction joins a growing list of job cuts announced in recent months.
Beyond Block, several major corporations have revealed layoff plans recently, including shipping giant UPS, retail leader Amazon, chemical company Dow, and media outlet the Washington Post.
