On March 3, Block announced it was cutting 4,000 jobs, nearly half its workforce, in the same breath as reporting $2.9 billion in quarterly gross profit, up 24% from the year before. The stock jumped 20% in a single day. If that sequence of events feels strange to you, you are reading it correctly. The strangeness is the point.
The honest version of what happened at Block is not a turnaround story or a restructuring story. It is a demonstration of what financial markets now reward: the ratio. Gross profit per employee at Block rose from roughly $750,000 in 2024 to $1 million in 2025. Post-layoffs, the company projects $2 million. That doubling is not driven by Block's product getting twice as good. It is driven by Block running a version of the product that requires half the people. The CFO called this move "bold, decisive." What it actually is, is legible to shareholders in a way that 4,000 employed humans simply are not.
The Metric That Ate the Org Chart
The tech sector shed 33,330 U.S. jobs in January and February of 2026 alone, a 51% increase over the same period last year. These cuts span profitable companies: Amazon, Meta after its most profitable quarter on record, Workday, Salesforce. Marc Benioff told Bloomberg that AI now handles 30 to 50 percent of work at his company. He said it plainly, without apparent discomfort. Andy Challenger, a workplace analyst who spent years skeptical that AI was truly displacing workers, has reversed his position. When the skeptics convert, the trend is usually already past the point of debate.
The common explanation is that layoffs fund AI investment. Roger Lee of Layoffs.fyi makes this argument, and it is not wrong, exactly. But it is incomplete. Companies are not cutting workers because they ran out of money for GPUs. They are cutting workers because the combination of AI productivity gains and investor pressure has changed what a "well-run" company looks like on a quarterly earnings call. The benchmark moved. Workers who were adequately productive six months ago are now measurably below the new threshold, not because they changed, but because the threshold did.
To be fair to Jack Dorsey: he did not pretend this was about financial distress. His post on X said the cuts came from "intelligence tools changing what it means to build and run a company." That is a more honest framing than most CEOs offer. The severance at Block was genuinely generous, 20-plus weeks plus a $5,000 stipend. Generosity, though, does not change the structural question of where those 4,000 people land in a labor market where Gallup reports worker engagement at a ten-year low and laid-off tech workers are reporting job searches lasting more than two years.
A Policy Question Wearing a Strategy Hat
What troubles me is not the technology. AI genuinely handles work that humans previously did, and the productivity numbers are real. What troubles me is the absence of any governing logic beyond shareholder return. When profitable companies fire workers to become more profitable, and when that decision is rewarded with a 20% single-day stock surge, the market is communicating a clear preference. Congress and the SEC can either respond to that preference with updated labor policy and disclosure standards, or they can keep treating each wave of layoffs as an isolated corporate decision with no systemic pattern worth addressing.
Block's gross profit per employee is projected to hit $2 million by end of year. That number will become a benchmark. Other boards will see it, and their CFOs will ask why their number is lower. The layoffs we saw in March are not the end of a cycle. They are a demonstration of what the new target looks like.
