Block Inc (NYSE:SQ) shares rose 17% in early trade on Friday after the company reported fourth quarter earnings in line with analyst expectations and announced a major workforce reduction.
The company said it is cutting more than 4,000 positions, reducing its staff by nearly half from over 10,000 to just under 6,000 employees.
Block CEO Jack Dorsey, in a letter to shareholders, described the move as a step to “move faster with smaller, highly talented teams using AI to automate more work.” “We believe Block will be significantly more valuable as a smaller, faster, intelligence-native company,” he wrote.
The layoffs will result in charges of approximately $450 million to $500 million, primarily related to severance, benefits, and noncash share vesting expenses.
For the fourth quarter, the company reported adjusted earnings per share of $0.65 on revenue of $6.25 billion, roughly in line with analyst expectations. Gross profit for the quarter increased 24% year over year to $2.87 billion.
For the full year, Block projected adjusted EPS of $3.66, surpassing analyst estimates of $3.22 per share and marking a 54% year-over-year increase. Gross profit is expected to grow 18% year-over-year to $12.2 billion.