Fintech company Block is returning to its pre-pandemic size, reducing its workforce to around 6,000 people, down from a Covid-era peak of more than 10,000, down from just 3,800 in 2019.
CEO Jack Dorsey says AI allows small teams to move faster. While this is certainly true, the deeper reset may reflect a harsher reality: stablecoin rails are likely beginning to squeeze the card-based fees that have fueled the company’s expansion.
Block has built its business on a payment system that charges merchants a percentage of each swipe. Stablecoins threaten to turn this percentage into pennies, thereby reducing the economic pie shared by card acquirers and fintechs. This change, more than workforce discipline, could define the company’s next chapter.
A recent note from Citrini Research titled “When Friction Went to Zero” argues that the rise of shopping agents – where AI assistants autonomously compare prices, optimize payment routes and execute transactions on users’ behalf – could accelerate the move away from card networks and onto stable rails.
In this environment, checkout occurs in seconds at near-zero cost, and machines prioritize price and speed over brand loyalty or checkout design.
The 2-3% merchant fees that support the traditional payments stack become harder to justify when an AI agent can route the same transaction for pennies, leaving companies like Block exposed to structural margin compression rather than temporary competitive pressure.
This isn’t Block’s first resizing attempt. In early 2024, the company began reducing its workforce as part of a previously revealed plan to reduce its workforce by up to 10%, capping its workforce at 12,000 after climbing to around 13,000 in 2023.
At the time, Dorsey acknowledged that “the growth of our business has far outpaced the growth of our business and revenue,” describing the move as a correction to pandemic-era expansion.
The latest, much larger reduction, to almost 40%, suggests that recalibration is no longer just about aligning costs with revenues, but about adapting to a payments landscape in which fee compression could be structural.
Investors applauded the move, sending Block shares up more than 23% in after-hours trading as the market rewarded the aggressive cost reset. Even so, the stock remains about 80% below its pandemic-era peak, underscoring how expectations have reset since the hiring boom.
Stablecoins already existed during this expansion, but they were largely seen as crypto trading instruments rather than a credible payment threat.
Only recently, with regulatory clarity through measures like the GENIUS Act and Circle’s IPO elevating stablecoins into the traditional financial system, have dollar-backed tokens started to look like a plausible alternative to the card-based rails that underpin Block’s business.
“Maybe Block laying off a ton of employees is a sign that AI is going to destroy everything,” financial analyst Ben Carlson, director of Ritholtz Wealth Management, posted on X.
“Or maybe the stock is down 80% from the highs and they hired too much and AI is a convenient excuse,” he wrote.
