By Dylan Morgan
Block’s Chief Financial Officer and Chief Operating Officer Amrita Ahuja defended the San Francisco-based payments company’s mass layoffs due to AI adaptation and called the shift inevitable.
“We’re seeing an inevitability around productivity gains and what that means for us as a business,” she said at the WSJ CFO Council Summit in Palo Alto, California, on Tuesday. “We can actually reinvest those gains into what the new shape of operating expenses looks like. It’s investing in AI infrastructure. It’s investing in the tokens. It’s investing in the people who are truly AI native, and able to 10x themselves.”
Block was founded in 2009 by Twitter co-founder Jack Dorsey, originally as Square, and currently owns Square, Cash App, and Afterpay, among others.
On Feb. 26, Dorsey announced Block was laying off more than 4,000 employees, over 40 percent of its headcount, as a result of rapidly improving AI models.
“Something has changed,” he said. “We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company.”
He added that repeated rounds of cuts are destructive to morale, and he wanted to “take a hard, clear action.”
“We over-hired during covid because I incorrectly built 2 separate company structures (square & cash app) rather than 1,” he wrote on X. “We have and do run an efficient company… better than most.”
After these layoffs were announced last month, Block’s stock price opened at $63.09 the next day, a 15 percent increase over the Feb. 26 closing price. Block’s stock is currently at $55.66 as of the March 27 closing price, over 73 percent down in the last five years.
Ahuja said at the summit that Block has been using and building these tools for years, and that as a CFO it’s better to act a bit early on this AI restructuring.
“We’ve now built enough use cases where we have the confidence that we can do remarkable work and actually do it much faster,” she said, adding, “We’ve seen a 40 percent improvement in developer velocity, just since September.”
Ahuja said the groups closest to development areas where there are the greatest agentic automation uses had the largest cuts, and groups closest to regulated or infrastructure areas had the least cuts.
She added that with these reductions they expect to be at $2 million gross profit per employee this year, up from around $1 million last year and $750,000 in 2024.
“Most companies have to now look at ‘how do we re-engineer our business processes to dramatically reduce costs?’” Silvio Tavares, CEO of San Francisco credit scoring company VantageScore, said on the panel. “The reality is this is not ‘is it going to happen?’ The question is ‘when is it going to happen?’”
Tavares said such layoffs from AI development are not happening at a large scale now but will dramatically accelerate over the next year.
