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Jack Dorsey, the founder of Twitter and now CEO at Block Inc, announced a major AI pivot on Feb. 26. Following this announcement, the Block (XYZ) stock price surged 25% on NYSE in after-market hours.
Dorsey’s Bitcoin-friendly company announced layoffs of 4,000 employees. That equals a massive 40% cut in staff.
Block Inc. (XYZ) Stock Price Jumps After AI Pivot
The share price of Block. Inc saw a major green candle on Feb 26, after Jack Dorsey announced a major restructuring at the firm.
Calling it “one of the hardest decisions in history,” Dorsey announced the layoff of 40% of its staff at his firm. As a result, the company has reduced its headcount from the existing 10,000, to less than 6,000.
The XYZ stock price ended up trading 5% up at $54.53 on Thursday, Feb. 25. Besides, the stock gained an additional 23.5% in the after-hours trading session, ending at $67. The stock is currently down by 16% since the beginning of 2026, and more than 15% over the past year.
The rally also comes as the company issued an upbit outlook for Q1 2026. For the first quarter, Block Inc. has projected an operating profit of $600million, against the estimated $574 million.
It also expects gross profit of $2.8 billion for Q1, surpassing analysts’ expectations of $2.72 billion. In addition, the firm reported stronger-than-expected monthly active users for Cash App.
The Jack Dorsey firm has also raised its full-year gross profit guidance. This signaled confidence in continued business momentum.
The Jack Dorsey firm has been overhauling its business structure and workforce since 2024 amid prolonged weakness in Block Inc.’s stock price. At the same time, the company has increased investment in artificial intelligence to improve operational efficiency. It includes developing an in-house AI tool known as Goose.
Jack Dorsey Draws Ire for Block Inc. Layoffs
As Jack Dorsey plans to cut the size of his employees at Block Inc. he also announced a severance package. All the affected people will get salary for 20 weeks, 6 months of health insurance coverage, additional $5000 for transition and more. He wrote:
However, Dorsey has been facing some heat over his recent decision. Block (NYSE: XYZ) is facing scrutiny after reports surfaced that it spent approximately $68 million on a single corporate event in September 2025.
The reported expenditure is roughly equivalent to the annual payroll of about 200 employees earning $340,000 each. Five months after the event, the company laid off around 4,000 workers, representing nearly 40% of its workforce, wrote Bull Theory.
The sequence of events has sparked debate among market observers. Some say that the job cuts were driven primarily by AI adoption or by broader concerns around cost management.
Comparison With Peer Companies
Over the years, Jack Dorsey’s Block Inc, has integrated Bitcoin deeply within its ecosystem. The company itself holds over 8,600 Bitcoins on its balance sheet. Besides, it allows more than 4 million Square merchants to accept BTC payments.
Through its Cash App integration the platform allows users to buy, sell, send, and automatically invest in Bitcoin. It also supports Layer-2 Lightning network for instant transfers.
Although the Jack Dorsey firm reduced its headcount by 40%, some market veterans have backed his decision. Austin Reif, the co-founder of the popular Morning Brew newsletter noted that other peer companies have much less headcount then what Block. Inc has. Reif wrote:
Similarly, veteran crypto investor Anthony Pompliano noted: “People aren’t going to like this, but Block should probably have less than 2,000 employees so they will still have 4,000 too many. On the positive side, Jack Dorsey and the Block team are not going to get enough credit for how generous the severance package is. I don’t think I have ever seen anything like that before”.
