Jack Dorsey's Block announced a massive workforce reduction, cutting over 4,000 employees from its 10,000-person workforce, representing nearly half of the company's total headcount. According to Dorsey's letter to shareholders, the company will reduce from over 10,000 people to just under 6,000 employees, with the majority of affected workers being asked to leave or enter consultation periods. Block shares surged 20% in extended trading following the announcement, reflecting investor confidence in the strategic restructuring. As reported by Fiscal.ai, the company reported revenue of $6.25 billion for its fourth quarter, below analysts' estimate of $6.32 billion.
Dorsey attributed the workforce reduction to the transformative impact of intelligence tools on company operations. In his letter to shareholders, Dorsey stated that "Intelligence tools have changed what it means to build and run a company and Block is already seeing it internally. A significantly smaller team, using the tools the company is building, can do more and do it better." This strategic pivot reflects broader industry trends where AI-powered automation is fundamentally reshaping how companies structure their workforce and operational processes. The announcement comes as Block continues to develop its own open source AI agent, Goose, which Dorsey has championed publicly for years as part of his advocacy for open source AI development.
Block estimates it will incur charges of approximately $450 million to $500 million in connection with the workforce reduction, according to regulatory filings. The company expects the majority of the restructuring charges will be incurred in the first quarter of fiscal 2026, consisting primarily of cash expenditures for notice period and severance payments, employee benefits, and related costs as well as non-cash expenses related to vesting of share-based awards. This substantial financial commitment reflects the scale of the operational restructuring and the company's commitment to implementing the transformation strategically.
Despite the workforce reduction, Dorsey continues his public endorsement of open source artificial intelligence development. As reported by CoinDesk, Dorsey publicly backed venture capitalist Chamath Palihapitiya's call to fully embrace open source AI, responding 'yes' to Palihapitiya's post warning that US restrictions on open models would be economically ruinous. The endorsement carries significant weight given Dorsey's long-standing advocacy for open source AI and his company's development of Block's own open source AI agent, Goose, which he has championed publicly for years. Palihapitiya's argument centers on a widening cost-performance disparity in AI development, warning that closing off open source AI would force American firms to pay $26 to $56 per million tokens for intelligence that rivals abroad can buy for $0.50 to $1.
The discussion extends beyond economics to national defense implications, with military and security concerns continuing to influence AI policy debates. According to CoinDesk reports, Palihapitiya argued that paying dozens of dollars per million tokens to defend US systems, while adversaries attack for far less, creates an unsustainable security imbalance. David Sacks echoed this view, agreeing with researcher Sebastian Mallaby that dangerous capability will soon spread freely regardless of policy. Mallaby pointed to similar concerns around Anthropic's Claude Mythos model, arguing the world moves quickly from almost nobody holding that power to nearly everyone holding it. Sacks had predicted Chinese models would reach advanced cyber capability within months, noting that Washington itself staggered its GPT-5.6 release over similar security worries.
