Block stock price surges after Jack Dorsey’s AI-driven layoffs

28 February 2026

New York, Feb 28, 2026, 13:41 EST — Market closed

Block jumped 16.8% Friday, finishing at $63.70, after the company rolled out a broad workforce reduction tied to AI plans and issued fresh guidance.

U.S. markets stay closed over the weekend, leaving Monday as the first real test: will the rally stick, or does it fizzle once investors look past the headline splash and drill into execution? Margins get a quick boost from sweeping layoffs, but the risk—something vital might snap—is always there.

Fintech investors are taking a hard line on costs these days. Growth alone isn’t enough anymore—it only gets rewarded when there’s a visible route to cash and profits.

Jack Dorsey, the chief executive, told investors the company is “reducing Block from over 10,000 people to just under 6,000,” describing the move as a shift in the way the firm operates. “Intelligence tools have changed what it means to build and run a company,” Dorsey said. “I think most companies are late.” S29 Q4cdn

Block’s latest quarterly letter put fourth-quarter gross profit at $2.87 billion, up 24% from a year earlier. For 2026, the company is aiming for $12.20 billion in gross profit and $3.20 billion in adjusted operating income, which it described as a 26% margin. First-quarter gross profit guidance landed at $2.80 billion.

Block announced late Thursday plans to slash more than 4,000 jobs—close to half of its staff—while warning of projected restructuring costs between $450 million and $500 million. The stock surged roughly 25% in after-hours trading on the news. The payments group delivered its update as the sector closes out a robust holiday quarter, buoyed by strong showings from both Visa and Mastercard.

By Friday, analysts were splitting hairs over what hits now versus what pays off down the line. Over at Evercore ISI, the note flagged “higher ROI investments in growth and FCF”—that’s free cash flow, or what’s left after spending on capital needs. Brett Horn at Morningstar called out the uncertainty on the long-term effect, saying it’s hard to call even if margins get a short-term bump from the move. Reuters

The layoffs landed right in the thick of a market debate: is AI making us all more productive, or just axing jobs? Reuters tallied over 61,000 AI-related layoffs since November. Brian Jacobsen at Annex Wealth has started calling AI “the new scapegoat.” Michael Ashley Schulman from Running Point Capital isn’t convinced, warning the firm could be ditching “the creativity and human intuition” behind its products. Reuters

Still, this trade can flip fast. Slash too much, and product development or sales could stall. Block’s numbers are tied closely to consumers, who might pull back if the economy stumbles.

Investors are zeroing in on one thing now: whether those promised cost cuts actually materialize, and if they do, whether Cash App and Square keep growing. Block has set its first-quarter 2026 earnings report for May 7, after markets close. The company’s conference call follows at 5 p.m. ET.

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Khadija Saeed is a financial markets reporter at TS2.tech. Her coverage ranges from stocks and technology to emerging industries and developments across global markets. She studied economics and finance at the London School of Economics and worked in market research before becoming a financial journalist. Follow Khadija Saeed on Google News.

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