Five months after slashing 40% of its workforce in the name of artificial intelligence, Block is making a strong case that the painful decision was the right one.
CEO Jack Dorsey cut over 4,000 jobs at Block earlier this year, shrinking the company from more than 10,000 employees to under 6,000 workers.
Dorsey framed the mass layoff not as a distress signal but as an “AI reset,” arguing that smaller, flatter teams powered by AI tools could outperform larger, more bureaucratic ones.
The move divided opinion sharply at the time, with Block’s stock jumping roughly 20% on the announcement while critics questioned whether AI was the genuine driver of the decision.
Block (SQ) reported second-quarter revenue of $6.618 billion, topping Wall Street’s expectation of $6.485 billion and surpassing the Zacks Consensus Estimate by 1.25%.
Adjusted earnings per share came in at $1.02, handily beating the expected $0.87 and offering investors a clear sign that the leaner operating model is generating real financial results.
Cash App gross profit surged 31% to $1.97 billion, helped in part by viral products like the Cash App Magic Wand payment tags that drove consumer engagement during the quarter.
Business lead Owen Jennings told MarketWatch the company shipped more features in the first half of 2026 than in the same period last year, pointing to higher output from a significantly smaller headcount.
CFO Amrita Ahuja said the confidence extends beyond one quarter, as Block raised its full-year outlook to $12.51 billion in gross profit and $4.02 in adjusted earnings per share, up from $12.33 billion and $3.85 previously.
Block shares have added roughly 30% since the start of the year, comfortably outpacing the S&P 500’s gain of approximately 13% over the same period.
The results arrive amid a broader wave of tech-sector layoffs tied to AI adoption, with companies including Oracle, Amazon, Dell, and Meta all trimming their ranks in recent months.
Few of those companies, however, have managed to post a quarter this clean so quickly after a restructuring of this scale, making Block’s results a closely watched data point across the industry.
The back-to-back beats signal that Dorsey’s argument, that AI tools can replace layers of human management without sacrificing output, is finding real-world validation in Block’s financials.
