block: Block stock jumps over 24% after company announces 4,000+ job cuts
Dorsey said the redundancies meant thousands of workers would either leave their jobs or enter consultation processes. CFO Amrita Ahuja said the layoffs were intended to prepare the company for the next phase of long-term growth. He explained that Block wants to change the way he works, using smaller teams and more AI tools to automate work.
Prevent stock bounce
Dorsey said he believes many other companies will soon make similar workforce changes as artificial intelligence makes jobs more efficient. He also said he chose to make layoffs now rather than gradually cutting jobs over the years to prevent repeated damage to employee morale. Following the news, Block’s stock price rose more than 24% in extended trading.
Prevent Layoffs
The layoffs were announced at the same time as the company’s fourth-quarter earnings report, CNBC reported. Block reported adjusted earnings of 65 cents per share and revenue of $6.25 billion, which was close to analyst estimates. For the full year, the company said it expects earnings of $3.66 per share; This figure is higher than analysts predicted. Due to the layoffs, Block expects to spend approximately $450 million to $500 million on severance pay, employee benefits and stock-related costs.
Most of these restructuring costs will occur in the first quarter, the company said. The stock closed at $54.60 and has been declining over the past few months and years, according to Investing.com. Block’s overall financial health is still rated as “outperform,” InvestingPro data said.
FAQ
Q1. Block, Inc. Why is he laying off his employees?
Block is cutting jobs to cut costs, use more AI tools and prepare for future growth with smaller teams.Q2. What happened to Block shares after the layoff news?
Block shares rose more than 24% in after-hours trading after the company announced layoffs and earnings results.
