Jack Dorsey Admits Block Overhired During Pandemic Boom

Block Inc. is making one of its biggest workforce resets yet. The fintech firm, which owns Square and Cash App, is cutting more than 4K jobs. It is also shrinking its headcount to under 6K employees. The move came alongside its Q4 2025 earnings release. The markets responded swiftly. Block’s shares rose between 24-25% in extended trading. CEO Jack Dorsey stated that the layoffs are the result of a strategic shift driven by AI tools. It is a drive for efficiency, not financial weakness. He also admitted the company overhired during the pandemic boom.

A Bold Bet on AI and Smaller Teams

Jack Dorsey framed the cuts as part of a broader rethink about how companies should operate. He said new intelligence tools are changing what it means to run a modern business. According to him, smaller and more focused teams can now produce far more output than before.

yes we over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024. but this misses all the complexity we took on through lending, banking, and BNPL. and that we’re now targeting $2M+ gross… https://t.co/uaKgTdzGob

— jack (@jack) February 27, 2026

He argued that a lean group using AI can match the productivity of much larger workforces. In his view, many companies have not yet adjusted to this reality. He believes the industry will catch up within the next year. The goal at Block is clear. The company now targets more than $2 million in gross profit per employee. That is roughly four times its pre-pandemic efficiency level.

Strong Business Performance Amid Cuts

Importantly, Jack Dorsey stressed the layoffs are not a distress signal. He repeatedly said Block’s core business remains healthy. The numbers back that claim. For full year 2025, Block reported about $10.36 billion in gross profit. It is up 17% year over year. Q4 gross profit reached roughly $2.87 billion. It is rising 24% from a year earlier. 

Growth came mainly from Cash App, financial services and the company’s Bitcoin ecosystem. Looking ahead, Block raised its 2026 outlook. It now expects about $12.2 billion in gross profit. With adjusted earnings per share near $3.66. Investors clearly liked the mix of strong growth and aggressive cost discipline. The sharp stock jump suggests Wall Street sees the restructuring as a positive reset.

From Over-Hiring to Drastic Reset

The current cuts follow a massive hiring surge during COVID. Block’s workforce jumped from about 3,900 employees in 2019 to about 12,500 by 2022. By the end of 2025, headcount still sat above 10,000. Jack Dorsey admitted the company “over-hired during covid.” He said part of the mistake came from running Square and Cash App as separate structures. That setup was corrected by mid-2024. But unwinding the pandemic expansion is taking time. The company expects restructuring charges between $450-$500 million. This mostly hits in early 2026.

Reactions and Broader Implications

Investor reaction has been strongly positive. But the response online is more mixed. Some critics argue the cuts highlight management missteps during the pandemic. Others worry the move signals growing pressure on white-collar jobs in the AI era. Block says affected U.S. employees will receive 20 weeks of base pay plus one additional week per year of tenure. Analysts also view the move as a potential bellwether for Silicon Valley. If Jack Dorsey is right, many tech firms may soon follow the same AI driven playbook.