Block, the financial services company formerly known as Square and led by Twitter co-founder Jack Dorsey, has announced a significant downsizing of its workforce. The company plans to lay off 40% of its staff, which translates to approximately 4,000 employees.

Motivations

The main reason behind this drastic decision is the adoption of new "intelligence tools". According to Block, these tools are able to perform the same tasks currently performed by employees, but with greater efficiency and productivity. The company therefore seems to be focusing on greater automation of internal processes.

Market reaction

Despite the negative impact on the employees involved, the announcement of the layoffs had a positive effect on the stock market. Block's shares actually rose by 23% following the news, suggesting that investors look favorably on the cost reduction strategy and the adoption of new technologies.