Fintech giant Block, led by co-founder and CEO Jack Dorsey, is set for a significant round of layoffs, cutting 931 employees—approximately 8% of its workforce. The news, first reported through a leaked company message seen by TechCrunch, was later confirmed in an internal email from Dorsey to Block employees. The latest layoffs come as part of the company’s broader organizational restructuring, but Dorsey has clarified that the decision is not financially motivated, nor is it an effort to replace employees with artificial intelligence.

The Reason Behind the Layoffs

According to Dorsey’s email, the layoffs fall into three distinct categories:

1. Strategic Reductions (391 roles cut) – Block is restructuring its workforce to align with its strategic goals. This involves downsizing teams that are considered non-essential to the company’s evolving business strategy.

2. Performance-Based Cuts (460 roles cut) – Employees who received a “below” rating or were trending toward low performance on internal evaluations were let go. Dorsey emphasized that the company is raising the performance bar to improve efficiency.

3. Flattening the Hierarchy (80 managers cut, 193 reassigned) – To streamline decision-making and increase agility, Block has eliminated 80 managerial positions and reassigned 193 managers to individual contributor roles. This move aligns with Dorsey’s organizational vision of maintaining a maximum depth of “innercore+4,” which refers to four reporting levels beyond his direct reports.

Beyond the layoffs, Block is also closing 748 open roles, except for those at the offer stage, critical operational positions, and key leadership roles. This hiring freeze is another step in the company’s restructuring efforts aimed at improving efficiency and responsiveness in a rapidly evolving financial technology landscape.

No AI Replacements or Cost-Cutting Target

Dorsey’s email explicitly denied speculation that the layoffs were a financial decision or part of an AI-driven automation initiative. He stated that the moves are centered around strategy, performance optimization, and a flatter hierarchy. "None of the above points are trying to hit a specific financial target, replacing folks with AI, or changing our headcount cap," Dorsey wrote. "They are specific to our needs around strategy, raising the bar and acting faster on performance, and flattening our org so we can move faster and with less abstraction."

This is not the first time Block has implemented large-scale layoffs. In January 2024, the company cut around 1,000 roles, bringing the total number of job cuts within a year to nearly 2,000. As of December 2024, Block employed approximately 11,300 people worldwide, according to its latest 10K filing.

While Block has framed the layoffs as a strategic move to enhance efficiency, they come at a time when the fintech sector is experiencing turbulence. With increasing regulatory scrutiny and competitive pressures, many financial services firms are undergoing internal restructuring to stay ahead.

The announcement has sparked mixed reactions among employees and industry observers. Some view it as a necessary step for the company’s long-term growth, while others express concerns about job security and morale.

As the fintech industry continues to evolve, Block’s latest restructuring signals a shift in how tech-driven financial firms are prioritizing efficiency, agility, and performance over sheer workforce size.