Block, Inc. (XYZ.US) announced on Thursday plans to reduce its workforce by over 4,000 employees, representing nearly half of its total staff. Following the announcement, the company's stock surged more than 27% in after-hours trading. In a letter to shareholders, Block's Co-Founder and CEO Jack Dorsey stated, "Today we shared a difficult decision with our team. The company's size will be reduced by nearly half, with total employees decreasing from over 10,000 to under 6,000. This means over 4,000 employees will be leaving or entering a consultation process." The workforce reduction news was released alongside Block's fourth-quarter earnings report. The payments company reported adjusted earnings per share of 65 cents and revenue of $6.25 billion for the quarter, largely in line with analyst expectations of 65 cents per share and $6.24 billion in revenue. The company's gross profit increased 24% year-over-year to $2.87 billion. For the full year, Block projected adjusted earnings per share of $3.66, exceeding analyst estimates of $3.22. According to a securities filing, Block anticipates incurring approximately $450 million to $500 million in expenses related to the workforce reduction, primarily consisting of severance payments, employee benefits, and non-cash expenses associated with stock vesting. The company expects the majority of restructuring costs to be recognized in the first quarter. Block's Chief Financial Officer Amrita Ahuja stated that the workforce reduction will establish a solid foundation for the company's "next phase of long-term growth." Ahuja commented, "We are choosing to adjust our operating model at a time when our business is accelerating. We recognize that by building a leaner, more capable team and leveraging AI to automate more work, we can move at a faster pace." Dorsey predicted that other companies will make similar workforce adjustments as businesses achieve greater efficiency from "smart tools." "Within the next year, I believe the vast majority of companies will reach the same conclusion and make similar structural adjustments," Dorsey said. "I prefer to complete this transformation proactively and transparently, rather than reactively." Recently, companies including Pinterest (PINS.US), CrowdStrike (CRWD.US), and Chegg (CHGG.US) have announced workforce reductions, directly attributing the moves to AI's reshaping of workforce structures. In a post on social platform X, Dorsey explained he faced two choices: either conduct gradual layoffs over many months or even years, or "act decisively now." "I chose the latter," he wrote. "Multiple rounds of layoffs would severely impact morale, divert focus, and betray the trust of customers and shareholders in the company's leadership." According to the company's annual report, Block had 10,205 employees globally as of December 31, 2025.