Block Inc. shares jumped over 23% in late trading following a major workforce reduction announcement. The financial services company is laying off more than 4,000 employees, cutting its staff by approximately 40%.
This move accompanies a better-than-expected fiscal 2025 fourth-quarter earnings report. Block reported adjusted earnings per share of 65 cents, exceeding analyst expectations of 64 cents. Revenue for the quarter was $6.25 billion, a 3.6% increase year-over-year.
The company saw robust growth in its commerce enablement and financial solutions segments. However, its bitcoin ecosystem revenue declined 19.6% amid a cryptocurrency bear market.
Gross profit surged 24% year-over-year, driven by strong performance in Cash App revenue and an increase in Square's gross payment volume.
CEO Jack Dorsey stated the layoffs are a strategic restructuring to align the organization with an AI-native future. The company aims for smaller, more focused teams to enhance speed and efficiency. Dorsey emphasized that advancements in artificial intelligence and internal tooling allow a significantly smaller team to achieve greater output.
For fiscal year 2026, Block forecasts gross profit of $12.2 billion and adjusted earnings per share of $3.66, a figure also ahead of analyst projections.