Fintech firm Block is shrinking back to its pre-pandemic size, cutting staff to around 6,000 from a Covid-era peak of more than 10,000, compared to just 3,800 in 2019.
CEO Jack Dorsey says AI enables smaller teams to move faster. While that’s certainly true, the reset may reflect a harsher reality: stablecoin rails are likely starting to compress the card-based fees that fueled the company’s expansion.
Block built its business on a payment system that charges merchants a percentage of each swipe. Stablecoins threaten to turn that percentage into pennies, shrinking the financial pie shared by acquirers and card-linked fintechs. That shift, more than discipline in the number of employees, may define the company’s next chapter.
A recent note from Citrini Research titled “When Friction Went to Zero” argues that the rise of agent shopping – where AI assistants autonomously compare prices, optimize payment routes and execute transactions on behalf of users – could accelerate the shift away from card networks and towards stablecoin rails.
In that environment, settlement happens in seconds at almost zero cost, and machines prioritize price and speed over brand loyalty or case design.
The 2% to 3% trading fee that sustains the traditional payment stack becomes 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 attempt at resizing. In early 2024, the company began cutting staff under a previously announced plan to reduce headcount by as much as 10%, capping its workforce at 12,000 after ballooning to around 13,000 by 2023.
At the time, Dorsey acknowledged that “the growth of our company has far outpaced the growth of our business and revenue,” and framed the move as a correction to the pandemic-era over-expansion.
The latest reduction, far deeper at nearly 40%, suggests that the recalibration is no longer just about aligning costs with revenue, but about adapting to a payment landscape where fee compression may be structural.
Investors cheered the move, sending Block shares up more than 23% in after-hours trading as the market rewarded the aggressive cost reset. Still, the stock remains about 80% below its pandemic-era peak, underscoring how far expectations have been reset since the hiring boom.
Stablecoins already existed during this expansion, but they were largely considered crypto trading instruments rather than a credible payment threat.
Only recently, with regulatory clarity brought forward by measures like the GENIUS Act and Circle’s IPO, lifting stablecoins into the mainstream financial system, have dollar-backed tokens begun to look like a plausible alternative to the card-based rails that underpin Block’s business.
“Maybe Block’s layoff of a ton of employees is a sign that AI will destroy everything,” financial analyst Ben Carlson, director at Ritholtz Wealth Management, wrote on X.
“Or maybe the stock is down 80% from its peak and they overhired and AI is a convenient excuse,” he wrote.
