Emily Mason

Jack Dorsey is cutting the workforce from 10,000 to 6,000, explicitly stating that "intelligence tools have changed what it means to build and run a company" and that they can run "more efficiently with fewer people." This is a direct "margin expansion via AI" play. By eliminating ~40% of headcount costs and substituting them with AI leverage (internal tool "Goose"), Block aims to decouple revenue growth from expense growth. This mirrors the "efficiency" playbook that drove massive returns for other tech giants (e.g., Meta), transforming the company from a growth-at-all-costs story to a profitability/FCF machine. Long SQ as a turnaround efficiency play. The market rewards disciplined cost-cutting combined with stable growth. A 40% cut is operationally traumatic; if the AI tools are not actually capable of replacing 4,000 humans, product quality and innovation will collapse.