Block Inc saw its stock (XYZ) surge as much as 18% in the last 24 hours after CEO Jack Dorsey announced mass layoffs at the company. The parent company of Square and Cash App said Thursday that it plans to lay off 40% of its workforce, or more than 4,000 employees.
“The core thesis is simple,” wrote Dorsey. “Intelligence tools have changed what it means to build and run a company.” During the company’s earnings call, the CEO also said “something happened in December of last year” when he realized how capable and intelligent AI models had become. “If there are any gaps in our usage of AI right now, it’s an application gap,” he said.
The pop-off in the AI sector over the last two years has shaped how big tech views its workflow. Companies are now investing billions into developing data centers to improve AI efforts. However, Block Inc deciding to shift its workforce to more AI-based is a huge step, one that will likely welcome mixed views amongst economists and stock experts.
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Those AI-focused fears have already become a reality at other companies, not just Block. Salesforce (CRM) cut roughly 4,000 customer-support roles last year because of AI advancements. Pinterest, meanwhile, has said it is laying off nearly 15% of its workforce as part of a plan to focus more of the company’s resources on AI-related roles. As the sector grows more dominant and bubble fears cool, more jobs may be taken up by artificial intelligence than humans, optimizing performance while saving companies money.
As for Block’s financials, its valuation metrics have significantly improved, with the P/E ratio dropping from 117.06x in Q3 2025 to 30.29x in Q4 2025, indicating a more attractive valuation for investors. However, growth metrics reveal a concerning trend, as earnings growth plummeted by 53.95% in Q4 2025, while revenue growth has stagnated at 0.30%. Profitability is on the rise, with gross margins improving to 42.82% and operating margins reaching 7.06%, suggesting enhanced operational efficiency. That profitability may also continue to climb with the AI restructuring, making Block (XYZ) stock a valuable stock option.