As Block’s strategy has shifted to deep AI embedment into the core processes, CEO Jack Dorsey predicts all the company’s middle management layer can be ultimately substituted with smart tech, boosting fintech’s service efficiency. The direction Block has chosen is starting to pay off: after 4,000 layoffs, the company sees robust financial growth across all the verticals. Should other companies follow the lead and substitute employees with AI en masse? Or perhaps, some other factors played their part in Block’s profitability boost?
According to the corporate Q1 2026 earnings announcement published on May 7, Block (parent company of Square and Cash App) saw its total revenue climb 5% year-over-year to $6.06 billion, while gross profit grew 27% to $2.91 billion. Adjusted EPS surged 52% annually to $0.85, surpassing analyst expectations. The fintech also projected full-year 2026 EPS of $3.85, representing annual growth of 62% and beating earlier analyst estimates of $3.64.
The XYZ stock jumped 6.7% the day after results were reported. Even after certain moderation in the coming days, Block shares still demonstrate around 5% growth over the last 30 days. Over the past 52 weeks, Block’s stock has gained 45.3%.
Strong performance was delivered just several months after Block cut around 40% of its workforce, heavily experimenting with a structure that leans on AI systems to coordinate work, leaving humans as player‑coaches or autonomous contributors. The company’s founder, Jack Dorsey, believes that’s where the future of workplace is moving.
He’s not alone in that conviction. Across the tech sector, tens of thousands of roles have been eliminated as AI becomes a justification for restructuring, contributing to one of the highest waves of layoffs in recent years.
Here are some of the companies that have publicly linked workforce changes to AI strategies:
- Atlassian eliminated around 1,600 positions, pointing to AI-driven efficiency as a key factor.
- Meta has also parted ways with thousands of staff as it deepens its AI integration, with executives acknowledging that growing automation is reducing the need for human headcount on certain projects.
- Oracle, meanwhile, is carrying out global workforce reductions as part of a broader shift toward AI-powered systems — a transition that has been described internally as swapping out roles in favour of automation.
- Cisco Systems announced plans to cut under 4,000 jobs, or about 5% of its workforce amid soaring demand for its AI tools and infrastructure.
- The image-sharing platform Pinterest plans to lay off under 15% of its workforce to reallocate resources to AI-focused roles and prioritize AI-powered products.
- Even traditional finance is feeling the pressure: HSBC is preparing to cut as many as 20,000 jobs over the coming years, as AI increasingly handles functions like compliance and document processing.
Block has ventured on the AI restructuring path to boost margins and get even more financially efficient. At the same time, some sceptics doubt the job cuts were purely AI-driven. Thousands of positions eliminated at Block might be partly a correction for COVID-era over-hiring, as the company earlier admitted it built two separate corporate structures unnecessarily.
Nevertheless, the analysis of other tech firms cutting thousands of jobs for AI enrichment shows that though their profits were at or near record highs at the time of the cuts, redirecting the wage bill toward AI infrastructure spending helped companies like Meta, Oracle or Atlassian propel AI investments, remain competitive in the AI-laden tech environment and accelerate a path to profitability.
For instance, Meta’s 2026 capital expenditure guidance shows the sum between $115-135 billion, nearly double the 72 billion dollars it spent in 2025. Giving the sack to over 8,000 people in May and some more (the number is still unknown) during the second layoff wave planned for the second half of 2026 gives tech giant more liquidity to invest in AI, which powers not only internal processes but also highly popular Meta wearables line-up, including Ray-Ban Meta – the best-selling smart glasses globally.
