Shares in the financial technology company Block have soared more than 20% in after-hours trading after its CEO announced it was laying off more than 4,000 of its 10,000 some employees due to its use of artificial intelligence.
“The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” Jack Dorsey said in a letter to shareholders in Block, the parent company to Square and CashApp. “A significantly smaller team, using the tools we’re building, can do more and do it better,” he said.
Dorsey's comments explicitly naming AI as a key driver behind the move were also posted on X, or Twitter, a company he co-founded.
Their assertion that the job cuts will add to Block's profitability and efficiency led investors to jump in and buy, analysts said.
Block’s shares gained 5% Thursday to $54.53, before it reported its earnings. They shot up to nearly $69 in after-hours trading. The mobile payments services provider reported its fourth quarter gross profit jumped 24% from a year earlier.
Layoffs by American companies remain at relatively healthy levels, but the job cuts at Block are the latest among thousands announced in recent months.
Apart from Block, a number of other high-profile companies have announced layoffs recently, including UPS, Amazon, Dow and the Washington Post.
