Block’s Controversial AI Layoffs Are Paying Off, Earnings Show

Block just proved a controversial bet right. Five months after cutting 40% of its staff and blaming the move on artificial intelligence, the payments company posted second-quarter results that beat almost every Wall Street estimate.

A trend in the tech sector has been developing alongside the rise of AI. Companies have cited the use of AI as a reason to slash jobs, with many seeing it as a ruse to mask tighter margins.

A Layoff That Split Wall Street

In February, CEO Jack Dorsey cut over 4,000 jobs at Block, shrinking the company from more than 10,000 employees to under 6,000. Dorsey said the decision came from a position of strength, not financial distress, and argued that smaller teams paired with AI tools could build more with less.

The move split opinion immediately. Block's stock jumped roughly 20% on the announcement, but critics questioned whether AI was the real driver. Days earlier, OpenAI CEO Sam Altman had warned that some companies were engaging in what he called AI washing, blaming the technology for cuts they would have made regardless.

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