Financial technology company Block is returning to its pre-pandemic size, cutting its staff to about 6,000 from a peak of more than 10,000 in the Covid era, compared to just 3,800 in 2019.
CEO Jack Dorsey says AI allows smaller teams to move faster. While that’s true, the deeper reset may reflect a harsher reality: stablecoin rails are likely starting to compress the card-based fees that fueled the company’s expansion.
Block built his business on a payments system that charges merchants a percentage of each use. Stablecoins threaten to turn that percentage into pennies, shrinking the economic pie divided by acquirers and card-linked fintechs. That change, more than the discipline of the workforce, can define the next chapter of the company.
A recent note from Citrini Research titled “When Friction Hit Zero” argues that the rise of agent purchasing—in which AI assistants autonomously compare prices, optimize payment routes, and execute transactions on behalf of users—could accelerate the move away from card networks and onto stablecoin rails.
In that environment, settlement occurs in seconds at almost zero cost, and machines prioritize price and speed over brand loyalty or payment design.
The 2% to 3% merchant fee that underpins the traditional payments stack becomes harder to justify when an AI agent can route the same transaction for pennies, leaving companies like Block exposed to structural margin compression rather than temporary competitive pressure.
This isn’t Block’s first attempt at resizing. In early 2024, the company began cutting staff under a previously revealed plan to reduce headcount by up to 10%, limiting its workforce to 12,000 after increasing to approximately 13,000 in 2023.
At the time, Dorsey acknowledged that “our company’s growth has far outpaced the growth of our business and our revenue,” framing the move as a correction to pandemic-era overexpansion.
The latest, much deeper reduction of almost 40% suggests that recalibration is no longer just about aligning costs with revenues, but about adapting to a payments landscape where rate compression could be structural.
Investors cheered the move, sending Block shares up more than 23% in after-hours trading as the market rewarded the aggressive cost reset. Still, the stock remains about 80% below its pandemic-era peak, underscoring the extent to which expectations have been reset since the hiring boom.
Stablecoins already existed during that expansion, but were largely seen as cryptocurrency trading instruments rather than a credible payments threat.
Only recently, with regulatory clarity advancing through measures like the GENIUS Act and Circle’s IPO elevating stablecoins into the mainstream financial system, have dollar-backed tokens begun to look like a plausible alternative to the card-based rails that underpin Block’s business.
“Maybe Block laying off a ton of employees is a sign that AI is going to destroy everything,” financial analyst Ben Carlson, principal at Ritholtz Wealth Management, posted on X.
“Or maybe stocks are down 80% from highs and overhired and AI is a convenient excuse,” he wrote.
