Block, the fintech company whose subsidiaries include Square, Cash App and Afterpay, is laying off staff at a tumultuous time for tech industry workers.
That’s according to an internal memo from CEO Jack Dorsey, obtained first by Business Insider, which states that “the growth of [Block] has far outpaced the growth of … business and revenue.”
The layoffs were executed this morning and affected staff in the Cash App, foundational and Square arms of Block. Reportedly, around 1,000 people — or 10% of Block’s headcount — were impacted.
“We decided it would be better to do at once rather than arbitrarily space them out, which didn’t seem fair to the individuals or to the company,” said Dorsey in the note to Block staff. “When we know we need to take an action, we want to take it immediately, rather than let things linger on forever.”
The firings don’t come as a total surprise. Block said in an earnings call last year that it would reduce its headcount from 13,000 in Q3 2023 to an “absolute cap” of 12,000 by the end of this year.
But they add to a sense of malaise in the fintech and broader tech sector, which has seen tens of thousands of workers let go in the past few weeks.
Just today, PayPal said it would fire some 2,500 people, or 9% of the company. Last week, Brex, the expense management startup, laid off 282, or 20% of its staff. And Treasure Financial, a platform offering cash management software for businesses, let 14 employees go, leaving the company with about a third of its former workforce.
Block’s suffered a difficult, downward-trending year and change.
Revenues from Cash App, the peer-to-peer payments service, have declined steeply. Meanwhile, the buy now, pay later service Afterpay, which Block acquired in 2021 for $29 billion, has posted serious losses. Block’s Bitcoin revenue has fallen corresponding with the fall in the price of the cryptocurrency last year (although that’s recovered recently). And Square faces growing competition on multiple fronts, including from Fiserv’s Clover, Toast and Stripe.
Investors are displeased. Square stock retreated around 30% from January 2023 to October as Block founder Dorsey took the reigns from ex-Square head Alyssa Henry.
Block’s recent attempts to reinvigorate business include adding generative AI features to Square, acquiring music-focused fintech startup Hifi and launching a self-custody Bitcoin wallet, Bitkey, in the form of a mobile app and hardware storage.
Block reported $5.62 billion in revenue for the third quarter of 2023, with $44 million in profit on its Bitcoin holdings.