Jack Dorsey is taking responsibility for a key mistake behind Block’s sweeping job cuts.
“Yes we over-hired during COVID,” the Block cofounder and CEO wrote Friday on X, responding to criticism that the company’s recent layoffs reflected managerial incompetence.
The admission comes a day after Dorsey announced he was slashing nearly half of Block’s workforce — reducing head count from more than 10,000 employees to just under 6,000 in one of the most dramatic single-round layoffs in recent tech history.
In his latest X post, Dorsey said the overhiring stemmed in part from a structural misstep. He had built “2 separate company structures (square & cash app) rather than 1,” he wrote, a setup the company corrected in mid-2024, he said.
That duplication inflated head count as Block expanded aggressively during the pandemic.
But Dorsey said critics were oversimplifying the situation. Over the past several years, Block also took on significant operational complexity, expanding into lending, banking, and buy-now, pay-later products, he said.
Block is now targeting more than $2 million in gross profit per employee — roughly four times its pre-COVID efficiency, which Dorsey said remained flat at about $500,000 per person from 2019 through 2024.
“We have and do run an efficient company… better than most,” he wrote.
As of Friday, Block’s share price is roughly $54, virtually flat compared to its price in 2018, seven years ago.
The stock spiked from less than $75 pre-COVID to over $275 in early 2021, before dropping sharply at the end of that year. Since early 2022, the stock has traded at below $100 per share.
In the original memo announcing the cuts, Dorsey said he chose to make one large reduction rather than conduct repeated rounds of layoffs, which he called “destructive to morale.”
He said that the business itself is strong, with gross profit growing and profitability improving.
Instead, he pointed to what he described as a fundamental shift in how companies operate to justify the layoffs.
Intelligence tools and smaller, flatter teams are enabling “a new way of working,” he wrote, one that changes what it means to build and run a company.
Several other tech companies — including Amazon, eBay, Meta, and Workday — have also announced cuts in recent months, often citing AI-driven efficiency gains and organizational streamlining.
Last September, Micha Kaufman, the CEO and founder of Fiverr, announced a 30% workforce cut, citing the need to help turn Fiverr into a leaner, faster “AI-first company.”
“If you don’t ensure that you sharpen your knives, you’re going to be left behind. It’s that simple,” Kaufman told Business Insider last May.
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