AI optimization of Block has paid off: profits soared after radical staff reduction
Payment giant Block, led by Jack Dorsey, has presented its second-quarter financial results, which not only met but exceeded Wall Street's boldest expectations. The key driver of this success is a radical 40% reduction in headcount, carried out five months ago and attributed to the adoption of artificial intelligence. The numbers speak for themselves: the company not only survived the layoffs of thousands of employees but has also entered a trajectory of sustainable growth.
Let me remind you that in February, Dorsey laid off more than 4,000 people, cutting the team from 10,000 to fewer than 6,000 specialists. This decision sparked a heated debate in the industry, especially against the backdrop of OpenAI CEO Sam Altman's warnings about so-called "AI washing"—a practice where companies mask ordinary layoffs as technological transformation. Skeptics, including many analysts, suspected that Block was simply trying to hide financial problems rather than building an AI-based strategy.
Financial metrics: exceeded all forecasts
However, the report has set the record straight. Block's gross profit for the second quarter reached $3.17 billion, up 25% year-over-year. Total revenue amounted to $6.62 billion, exceeding the consensus forecast of $6.49 billion, and earnings per share came in at $1.02. The dynamics of Square are particularly impressive: payment volume through this service grew by 10%—the best result in the past three years. The Cash App is also showing steady growth, reaching 59 million active users in June.
Head of the business division, Owen Jennings, emphasizes that in the first half of 2026, the company introduced more new features than in the same period a year earlier. "We can launch higher-quality products significantly faster, and the reason is that we are actively implementing innovations related to artificial intelligence," he noted. CFO Amrita Ahuja confirmed the long-term positive trend by raising annual guidance: the gross profit forecast has been raised from $12.33 billion to $12.51 billion, and expected earnings per share from $3.85 to $4.02.
A new paradigm or an exception?
Cash App's success is largely driven by the launch of the innovative Magic Wand solution with NFC support. Against the backdrop of similar optimization processes at Oracle, Amazon, Dell, and Meta, Block is becoming a rare example of how aggressive workforce reduction combined with an AI strategy leads to real growth in key metrics.
My expert view: Block's experience demonstrates that AI-driven optimization can be not just an excuse for layoffs, but a real tool for improving efficiency. However, it is important to understand that such success requires not just cost cutting, but a deep restructuring of business processes. The question is whether this case will become a new management standard in the tech industry or remain a rare exception—we will get the answer when competitors present their quarterly reports.