Block Cuts Headcount Amid Strategy Shift and Shareholder Pressure
Date: 2025-03-27 Author: Oliver Abernathy Categories: BUSINESS
The company Block, founded by Jack Dorsey, has cut about 1,000 employees, continuing to restructure its internal structure and management approach. Dorsey himself announced this in a letter to the staff, emphasizing that the measures are not related to financial problems, but to the need to optimize work processes.
According to Dorsey, the layoffs affected three categories of employees. Almost 400 people were dismissed from their positions for reasons related to the company's long-term strategy. Another 460 employees did not pass internal performance indicators. In addition, about 80 managers lost their positions as part of the reorganization aimed at moving to a simplified management structure - the so-called "core + 4" model. More than 190 managers were transferred to executive roles to reduce the number of management levels.
This is the second large-scale layoff at Block in the last 15 months. At the end of 2024, the number of employees was approximately 11,300 people worldwide. Despite the noticeable layoffs, Dorsey noted that they are not caused by the implementation of artificial intelligence or a crisis within the company. The main goal, according to him, is to increase overall productivity and better meet current market conditions.
The layoffs occur amid growing discontent among shareholders concerned about the company's results in the fourth quarter. According to CNBC, Block did not meet analysts' expectations: earnings per share amounted to $ 0.71 instead of the expected $ 0.87, and revenue reached $ 6.03 billion, falling short of the expected $ 6.29 billion.
Nevertheless, the company continues to develop its products. Recently, Block announced the expansion of the functionality of its Bitkey crypto wallet. The update allows owners to pre-determine the heir to their digital assets without having to transfer seed phrases or PIN codes during their lifetime, which significantly increases the security of storing bitcoins.
Block is thus reviewing its internal processes and strategic priorities, trying to balance the interests of employees, investors and users of its technology solutions.
