Block, the financial technology company behind Square, Cash App and Afterpay, is laying off more than 4,000 employees — roughly 40 per cent of its workforce — as it restructures around artificial intelligence.The cuts will reduce the company’s headcount to just under 6,000 employees. According to co-founder and CEO Jack Dorsey, the decision is not tied to financial struggles but to the growing capabilities of AI tools.In a letter to shareholders, Dorsey wrote that “a significantly smaller team, using the tools we’re building, can do more and do it better,” adding that advances in intelligence tools are accelerating every week.Block’s chief financial officer, Amrita Ahuja, echoed that message in company guidance, saying the company sees an opportunity to move faster with smaller, highly skilled teams by automating more work through AI.On social media platform X, Dorsey emphasized that Block’s business remains strong and that gross profit continues to grow. He said the company chose to act decisively rather than make gradual reductions over a longer period. Affected employees will receive at least 20 weeks of severance pay depending on tenure, equity vesting through the end of May, six months of health coverage, an additional $5,000 in support, and the option to keep company devices.Investors responded positively to the announcement, sending Block’s shares up as much as 24%.The layoffs come amid a broader wave of job cuts across the technology sector as companies adjust to both post-pandemic demand and the rapid rise of AI. During the pandemic, many tech firms significantly expanded their workforces to meet surging demand for digital services. Block, for example, grew from fewer than 4,000 employees at the end of 2019 to more than 10,000 before the layoffs. Meta nearly doubled its headcount over a similar period.Now, many companies are returning closer to pre-pandemic staffing levels while increasingly relying on AI to streamline operations. Amazon, Meta, Microsoft and Verizon have all announced significant layoffs in the past year, with executives frequently highlighting AI as a transformative force reshaping how work is done.Dorsey suggested that other companies may soon follow suit. He said he believes many firms are late in recognising the structural changes AI demands and predicted that most will reach similar conclusions within the next year.