Jack Dorsey's payment company Block will cut half its staff because of AI. Shares soared
Dorsey believes that within a year, that's what most companies will do
Block will cut nearly half of its staff due to a bet on automation / Photo: Block
Digital payments operator Block, founded by billionaire Jack Dorsey, announced in a letter to shareholders that it will cut more than 4,000 employees out of 10,000. In explaining the decision, Dorsey cited the rapid growth in the capabilities of AI tools, so that much smaller teams can perform more tasks and do so more efficiently. He predicts that other players will soon follow suit.
"I don't think we came to this realization too early. I think most companies are lagging behind. Over the next year, I believe they will come to the same conclusions and make similar structural changes. I'd rather do it fairly and on my terms than be forced to act reactively," Dorsey wrote.
Following the announcement, Block's quotes jumped 25% in extended trading.
The fintech company is restructuring its business model and optimizing its staff from 2024 - amid lagging performance of its shares, Bloomberg reports . Block's capitalization has fallen more than 15% over the past year, while it is also actively investing in artificial intelligence to improve efficiency and automation, including the creation of a proprietary tool called Goose.
Block expects its cost of the layoffs to be $450 million to $500 million through severance and other spending.
This article was AI-translated and verified by a human editor
