TLDR:
- Jack Dorsey’s fintech company, Block, is laying off around 1,000 employees, which amounts to 10% of its total headcount.
- The layoffs will impact staff in Block’s subsidiaries, including Cash App, Afterpay, and Square.
Jack Dorsey’s financial services company, Block, is making a significant reduction in its workforce, with around 1,000 employees expected to be laid off. This amounts to approximately 10% of the company’s total headcount. The layoffs will affect staff in Block’s subsidiaries, including Cash App, Afterpay, and Square.
According to an internal memo written by Dorsey, the decision was made to lay off the employees all at once rather than spacing out the cuts. Dorsey stated that the immediate action was deemed fairer to both the individuals affected and the company as a whole.
The layoffs come as Block faces several challenges. Revenues from its peer-to-peer payments service, Cash App, have declined significantly. Additionally, its buy now, pay later (BNPL) service, Afterpay, which Block acquired for $29 billion in 2021, has been posting serious losses. Furthermore, Block faces competition from other companies such as Fiserv’s Clover, Toast, and Stripe.
In an earnings call last year, Block had already announced plans to reduce its headcount from 13,000 in Q3 2023 to a maximum of 12,000 by the end of this year. The company reported $5.62 billion in revenue for Q3 2023, with a profit of $44 million from its Bitcoin holdings.
In September 2021, Dorsey was appointed Head and Chairperson of Block, the company he co-founded in 2009. The company also changed its name from Square to Block in December 2021. According to filings with the US Securities and Exchange Commission (SEC), Dorsey’s roles and responsibilities within the company will remain unchanged.
Overall, the layoffs at Block reflect the challenges the company is facing in its various subsidiaries, particularly Cash App and Afterpay. It remains to be seen how these developments will impact Block’s future performance and strategy.
