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The layoffs are the most visible signs of how the industry is navigating the impact of AI, with Block’s CEO, tech billionaire Jack Dorsey, warning that most companies were “late” to realize the emerging technology’s potential.
“At its core, it’s about how some companies may be run going forward – not just doomsday headcount reductions, but also enabling higher ROI investments in growth and FCF,” analysts at Evercore ISI wrote, referring to free cash flow.
Accelerating AI adoption is helping companies to cut jobs in divisions most exposed to automation. Economists at Goldman Sachs have estimated that AI was responsible for job losses amounting to a 5,000 to 10,000 hit to average monthly job growth in the industries most exposed to it in 2025.
Block was one of the companies that aggressively hired during the pandemic as the use of digital payments and online commerce spiked.
“In Block’s case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat,” said Matt Britzman, an analyst at Hargreaves Lansdown.
The company’s workforce jumped from about 3,800 employees in 2019 to more than 10,000 in 2025 as it battled increasing pressures from rising competition in its payments and buy-now-pay-later segments.
“While the RIF (reduction in force) is large, it does bring Block’s headcount back toward pandemic-era levels, making it a standout in gross profit per employee, well ahead of its peers including Visa,” J.P. Morgan analysts said.
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https://economictimes.indiatimes.com/markets/us-stocks/news/us-stocks-block-shares-soar-16-as-jack-dorsey-leans-on-ai-to-trim-workforce/articleshow/128856031.cms
