🚨 Mass layoffs at Block: the market sees not a crisis but increased efficiency

The company Block (Cash App, Square, Afterpay) carried out a simultaneous reduction in staff: the number of employees decreased from approximately 10,000 to less than 6,000. Essentially, over 4,000 jobs were eliminated amid the implementation of AI tools.

📈 The market reacted paradoxically: the company's shares rose by approximately 22% after the announcement.

According to Jack Dorsey, this is not a crisis measure:
— the company is profitable and continues to increase revenue
— the implementation of analytical and AI tools allows a smaller team to do more
— AI has become part of employees' daily work and the performance evaluation system

The internal AI platform "Goose," which started as an experimental tool, has become the main operational framework of the company. Over the past 6 months, engineer productivity has increased by approximately 40% per person — this was the key factor in optimizing the staff.

📊 Financial expectations:
— profit growth forecast for 2026: +54%
— expected EPS: $3.66 ( above consensus of $3.22 )
— gross profit: +18%

Wall Street logic is simple: lower personnel costs → higher margins → higher company valuation.

➡️ Importantly, Block previously carried out phased reductions of 10% at the beginning of the month and about 1,000 people last year, while simultaneously strengthening requirements for AI tool proficiency within the company.

➡️ Key signal: the market's reaction shows that mass optimization through AI is perceived by investors as a factor for increased efficiency, not a risk to the business.

Opinion:
Block's decision is not an isolated case but a prototype of a new corporate model. In the coming years, the key driver of company valuation will be not staff growth but productivity per employee through AI. This changes the fundamental economics of labor and reinforces the trend toward "lean companies" with high margins.