😱United States🇺🇸: shares of the payment company Block rose 25% after the announcement that the owner wants to reduce staff by half in favor of AI

😱United States🇺🇸: shares of the payment company Block rose 25% after the announcement that the owner wants to reduce staff by half in favor of AI

Not exactly by half… the upcoming layoffs will affect 4,000 employees out of a workforce of 10,000. The move was announced by billionaire Jack Dorsey, the company’s founder, in a letter to shareholders.

➡️ Preamble: over the past year, Block’s market capitalization declined by more than 15%, prompting the fintech company to begin restructuring its business model.

➡️ Context: at the same time, Block is actively investing in artificial intelligence, automation, and broader efficiency improvements. As part of this effort, the company developed an internal tool called Goose.

➡️ Associated costs: expenses related to workforce reductions will amount to 450-500 million USD due to severance payments and other costs. Laid-off employees will receive salary equivalent to 20 weeks + 1 additional week for each year of service, shares vested until the end of May, 6 months of health insurance, corporate devices, and 5,000 USD to cover needs during the transition period (those located outside the United States will receive equivalent support considering local regulations).

➡️ Preliminary results: during after-hours trading on February 26, Block’s share price increased by more than 25%, reaching a peak of 67.94 USD.

Overall, the decision reflects a broader corporate strategy focused on cost optimization and the adoption of new technologies.

#news #UnitedStates

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