Block premarket shares rose over 20% on Friday after CEO Jack Dorsey said he would lay off over 4,000 of its more than 10,000 employees, the Associated Press reports.
Dorsey said the company is reconfiguring thanks to the use of AI.
“The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” Dorsey said in a letter to shareholders in Block, the parent company to online payment platforms such as Square and Cash App. “A significantly smaller team, using the tools we’re building, can do more and do it better.”
The assumption is the layoffs will add to Block’s profitability, hence the jump in stock value.
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Block’s shares rose to $54.53 on Thursday and then close to $69 in after-hours trading.
