TLDR:
- The payments and crypto company Block, led by CEO Jack Dorsey, has initiated layoffs as part of a cost-cutting plan announced in 2023.
- The company aims to reduce staff levels from around 13,000 to 12,000 by the end of 2024.
- Analysts believe the focus on cost-cutting and profitability could benefit Block and open up its shareholder base.
- Despite the layoffs, Block’s stock price remains stable.
The payments and crypto company Block, led by CEO Jack Dorsey, has started laying off employees as part of a cost-cutting plan announced last year. The company aims to reduce overall staff levels from around 13,000 to 12,000 by the end of 2024. The layoffs represent the company’s initial progress towards that goal through a combination of performance-based adjustments and other restructuring moves.
Block has stated that its rapid employee growth has surpassed expansion in its core business and revenues. The broader technology sector has seen numerous layoffs recently amid a shaky economy and rising interest rates.
While the exact number of layoffs is unknown, Block has reiterated its commitment to reaching the 12,000 target by next year. The reductions are expected to generate cost savings in areas like real estate and discretionary spending.
Despite the layoffs, Block’s stock price showed little change on Tuesday. Some analysts view the increased focus on costs and profitability positively, potentially opening up Block’s shareholder base. However, others warn that it could hinder top-line growth.
Although layoffs in the cryptocurrency and fintech industries have calmed down in recent months, they were a leading theme throughout 2022 and 2023. Companies like KuCoin and Robinhood announced plans for workforce reductions, while Luno and Coinbase also reduced their employee counts.
Block, owned by Jack Dorsey, is one of the largest publicly traded companies holding Bitcoin. It has over 8,000 tokens valued at $342 million. One of the larger Bitcoin purchases occurred nearly three years ago when the company bought $170 million worth of Bitcoin, paying an average of $51,000 per Bitcoin.
