Fintech firm Block to let go nearly 1,000 employees in second significant restructuring move as CEO Jack Dorsey aims to “raise the bar and act faster on performance”.
Fintech firm Block, operating CashApp, Square, and Tidal, is set to let go nearly 1,000 current employees in its second significant restructuring move in just over a year. The layoffs will impact more than 930 employees, with another nearly 200 managers being moved into non-management roles, and another nearly 800 open jobs being closed.
Block layoffs refer to the practice of temporarily halting hiring in an industry or company due to unforeseen circumstances.
This can be caused by economic downturns, changes in market demand, or technological advancements.
According to a report by the Bureau of Labor Statistics, block layoffs have increased significantly since 2020.
The average duration of a block layoff is around 6-12 months, affecting approximately 10% of workers in affected industries.
Companies may use this strategy to conserve resources and maintain competitiveness.
According to an email sent by CEO Jack Dorsey to employees, the decision to implement these changes is not driven by a specific financial target or the need to replace employees with artificial intelligence. Instead, Dorsey aims to ‘raise the bar and act faster on performance‘ by flattening the organization’s structure, allowing for more agility and speed.
Dorsey struck a similar tone in his email last year when notifying staff of layoffs, stating that the company needed to ‘build like a startup again.’ This time around, he emphasized the need for swift action, citing that the company is ‘behind in our actions’ and that this reorganization will help focus on increasing stock value.
Dorsey believes that Block needs to move faster to stay ahead of the transformational moment its industry is undergoing. He emphasized the importance of automation, openness, and access, stating that the company must continue to increase these aspects to remain competitive.
Block’s stock has taken a hit this year, with a 29% decline in value so far. The company’s revenue and profits have grown less over the last year, raising concerns among shareholders. Despite Dorsey taking more operating control, the company’s performance has been a subject of scrutiny.
The layoffs and reorganization are part of Block’s efforts to become more efficient and agile. By closing open jobs and reducing staff levels, the company aims to move faster and with less abstraction, allowing it to stay ahead in its industry.
