Jack Dorsey’s Block Announces 1,000 Layoffs

Block (Square, Tidal, Cash App), led by Jack Dorsey, is reducing its workforce by around 1,000 employees (8%) as part of a strategic move to improve efficiency and profitability, aligning its growth with business performance.

jack dorsey layoffs block
jack dorsey layoffs block

Block, the parent company of Square and Cash App, revealed plans to reduce its workforce by around 8% in the coming year. The decision to downsize the company, helmed by Twitter co-founder Jack Dorsey, is aimed at improving efficiency and bolstering profitability.

The Backstory

Block, a digital payments company based in San Francisco, operates platforms like Square, Cash App and Tidal. It was founded by Jack Dorsey, who also founded Twitter.

Over the years, the company has experienced substantial growth, which hasn’t always been matched by its business and revenue. Jack Dorsey, the CEO of Block, acknowledged that this disparity is unsustainable and can hinder the company’s performance.

The Plan

The reduction in workforce will result in the company capping its headcount at 12,000 employees by the end of 2024, down from the current count of over 13,000.

Block’s management intends to achieve this goal by implementing various measures, such as performance management and streamlining teams and functions to eliminate duplication.

Why the Cuts?

Block recently reported a significant increase in third-quarter losses, nearly doubling to $29 million compared to the previous year. However, net revenue for the same period rose by 24%, reaching $5.62 billion.

Block is determined to focus on profitability and efficiency, redirecting its investments towards customer retention and sustainable long-term growth.

What to Expect

This employee reduction is expected to bring about a ~10% reduction in the workforce compared to the headcount at the end of the third quarter.

The company will also aim to reduce costs in areas like corporate overhead, real estate, travel, and vendor relationships.

Jack Dorsey’s Vision

During a recent call with analysts, Jack Dorsey outlined his priorities as the head of Square, which is part of the Block family of companies.

He plans to improve the company’s platform, leverage artificial intelligence more effectively, and adopt a more localized approach in sales.

Dorsey noted that Square has been held back by traditional onboarding processes. Many sellers are onboarded through self-serve channels, which can be time-consuming.

Dorsey is committed to streamlining this process to achieve quicker results over the next year.

Dorsey intends to lead Square until the business unit experiences significant growth and becomes more innovative. He recognizes that there are challenges within the company but is determined to address them promptly.

Analysts’ Perspective

While some analysts caution against overly aggressive cuts that could jeopardize growth, many view Dorsey’s more active role in the company positively. They anticipate a leaner and more experimental corporate culture that may lead to increased innovation and efficiency.

Jack’s Message Sent To Block Staff:

As I said in my note to Block, the growth of our company has far outpaced the growth of our business and revenue.

It’s not sustainable. And Square’s number of people has far outpaced our growth and performance. In fact, I believe it’s slowing us down and frustrating everyone. Which is not fair to you all, or our customers.
So, Square is going to be smaller than we are today by the end of next year. We are going to do so through performance management, scoping our work, and restructuring to remove duplication and redundancy. Therefore we will not take a single action, but rather look critically at everything we’re doing and act thoughtfully.

I also believe it’s important to be upfront and transparent about all this, so you all can make your own decisions if you need to. You may not be up for the uncertainty or shrinking our team, and want to leave. That’s perfectly reasonable. But I’d rather us provide the information than to work secretly in the dark.

Everything square-core and I do will be done with transparency and straightforward reasoning you’ll have access to. You may not agree with our decisions, but we’ll do our best to explain why we believe they are right.

Thank you all,

jack
Gerard Thompson
Gerard Thompson

Gerard Thompson, a seasoned tech industry worker understands the struggles of facing layoffs firsthand. Having navigated the uncertain and daunting world of job loss himself. Gerard is the founder of JustLayoffs.com

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