AI Layoffs Catch up With Fintech Industry

Artificial intelligence-driven job cuts reached the financial technology sector last week as Block announced it is reducing its workforce by 40 percent, shrinking from more than 10,000 employees to just under 6,000, effective immediately.

The company, which operates Square and Cash App, said productivity gains from AI have enabled it to operate more efficiently with fewer workers. According to the company, the number of engineering production codes shipped per engineer has risen more than 40 percent since September 2025 due to AI tool adoption.

Some experts expressed concerns about the growing trend and scale of such cuts.

AI-Driven Job Cuts

Block said AI and engineering initiatives have accelerated developer output and shortened internal product launch timelines. Its proprietary AI-powered digital assistants are also being used to automate financial and business management functions for customers.

The move adds Block to a growing list of firms that have reduced headcount amid AI-driven efficiency gains, including Amazon, UPS, Nestlé, and Salesforce.

“The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We are already seeing it internally. A significantly smaller team using the tools we are building can do more and do it better,” Block CEO Jack Dorsey said during the company’s fourth-quarter earnings call, explaining the scale of the cuts.

Dorsey suggested similar restructurings could spread across the industry as AI capabilities improve rapidly.

“I would rather get there honestly on our own terms than be forced into it reactively,” he said.

AI is expected to play a central role in Block’s future operations, including decision-making, risk management, and customer service.

“We are moving toward a model where our customers can build their own features directly on top of our capabilities,” Dorsey added.

The layoffs come despite strong business performance. Gross payment volume (GPV) rose 10.3 percent year over year in the fourth quarter. Full-year Square GPV growth improved to 10 percent from 8.6 percent the prior year, while Cash App profit jumped 33 percent, to $1.83 billion in the fourth quarter compared to a year earlier.

Investors responded positively. Block shares surged by 27 percent following the earnings release and layoff announcement, suggesting that markets may view the reductions as a cost-efficiency measure.

Industry-Wide Trend?

Russell Twilligear, head of AI research and development at BlogBuster, told The Epoch Times that Block’s elimination of roughly 4,000 jobs may not be an isolated case.

“A lot of fintech companies hired a lot of people when money was good, and business was booming. Now, things are slowing down, and they are realizing they don’t need that many people. This is just business as usual,” he said.

“The next round of companies that are going to be doing layoffs are crypto companies, finance companies (apps), and the tech startups that spent a lot of money but didn’t make enough back. Basically, if a company grew extremely fast but profits weren’t there, they would be doing the same thing as Block,” Twilligear added.

Unemployment Impact Still Limited

Despite a growing wave of AI-related job cuts, unemployment has not yet risen significantly. Over the past 12 months, the U.S. unemployment rate has remained in the 4.0–4.50 percent range, still a historical low.

“Anecdotal evidence suggests jobs are already being lost in sectors vulnerable to AI automation. Overall, though, firms don’t appear to be replacing workers with AI on a significant scale, and we doubt that unemployment rates will be pushed up heavily by AI over the next few years,” according to an Oxford report.

One explanation for the gap between layoffs and unemployment data may be that productivity gains are translating into higher incomes and spending, supporting job growth in other areas of the economy.

Long-Term Risks and Trade-Offs

Still, Patrizia Porrini, professor of management at Long Island University, expressed concern about both the scale and permanence of such job cuts.

“The tacit knowledge, institutional memory, and human relationships embedded in those roles took years to build. This isn’t a cautious play—it’s a genuine, high-stakes bet on capturing AI’s operational gains,” she told The Epoch Times.

For Block, however, Porrini said the strategy may be defensible.

“Payments and financial transactions are precision-driven, high-volume, and increasingly suited to AI execution. The AI-GDP Index calculation—where productivity gains supersede losses from retiring traditional tech — may genuinely favor this move,” she added.

She cautioned that other sectors, particularly those reliant on complex human expertise such as medicine and financial advisory services, should move carefully.

“Deleting those intangible resources and relationship configurations to chase efficiency could hollow out the very thing that differentiates. Proceed with caution,” she said.

“The honest question isn’t just what does AI gain us—it’s what do we quietly lose, and will we only understand the true AI-GDP calculation in hindsight?”