Jack Dorsey says Block overhired during COVID, but that blaming the company's layoffs on overstaffing alone "misses all the complexity."
"Yes we over-hired during COVID," the Block cofounder and CEO wrote Friday on X, responding to suggestions that the company's recent layoffs reflected managerial incompetence.
"I incorrectly built 2 separate company structures (Square & Cash App) rather than 1, which we corrected mid-2024, but this misses all the complexity we took on through lending, banking, and BNPL," he wrote, referencing the company's buy now, pay later services.
Dorsey's post came after he announced he was slashing nearly half of Block's workforce — reducing head count from more than 10,000 employees to just under 6,000 in one of the most dramatic single-round layoffs in recent tech history.
Block is now targeting more than $2 million in gross profit per employee — roughly four times its pre-COVID efficiency, which Dorsey said remained flat at about $500,000 per person from 2019 through 2024.
"We have and do run an efficient company… better than most," he wrote.
Dorsey later reposted an X post in which a user said there was "very little evidence" that Block was "bloated."
At Thursday's close, Block's share price was roughly $54, virtually flat compared to its price in 2018, seven years ago.
The layoff announcement looks set to push the stock higher, with premarket trading suggesting a surge to $64 at Friday's open.
The stock spiked from less than $75 pre-COVID to over $275 in early 2021, before dropping sharply at the end of that year. Since early 2022, the stock has traded at below $100 per share.
In the original memo announcing the cuts, Dorsey said he chose to make one large reduction rather than conduct repeated rounds of layoffs, which he called "destructive to morale."
He said that the business itself is strong, with gross profit growing and profitability improving.
Instead, he pointed to what he described as a fundamental shift in how companies operate to justify the layoffs.
Intelligence tools and smaller, flatter teams are enabling "a new way of working," he wrote, one that changes what it means to build and run a company.
Several other tech companies — including Amazon, eBay, Meta, and Workday — have also announced cuts in recent months, often citing AI-driven efficiency gains and organizational streamlining.
Last September, Micha Kaufman, the CEO and founder of Fiverr, announced a 30% workforce cut, citing the need to help turn Fiverr into a leaner, faster "AI-first company."
"If you don't ensure that you sharpen your knives, you're going to be left behind. It's that simple," Kaufman told Business Insider last May.
