Block, a fintech corporation headed by
Twitter co-founder
Jack Dorsey that has several subsidiaries including Square, Cash App, and Afterpay, is
laying off employees
in “large numbers”. According to an internal memo from CEO
Jack Dorsey
obtained by Business Insider, the company’s growth has outpaced its business and revenue growth, necessitating the need for job cuts.
The company laid off around 1,000 employees, affecting Cash App, Foundational, and Square divisions, which account for 10% of its workforce. Previously, the company cut 40 roles in its music streaming platform, Tidal.
The executives decided not to do it separately but instead preferred to take the action at once. Dorsey in his memo acknowledges this and writes that the teams were confident with their direction and the company was ready to take the decision. "Why is so much happening in one single day? All of these teams were confident in the direction they're taking, and were ready to take action within the next 2-3 weeks," Dorsey wrote in his memo.
Last year, Block announced plans to decrease its headcount to 12,000 workers from 13,000 by late 2023.
“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,” wrote Dorsey in the note to employees. “When we know we need to take an action, we want to take it immediately, rather than let things linger on forever.”
Block had a challenging year as its revenue from Cash App, Afterpay, and Bitcoin declined. Its subsidiary, Square, also faced tough competition. To address these challenges, Block introduced generative AI to Square, acquired Hifi, a fintech startup, focused on music, and launched Bitkey, a self-custody Bitcoin wallet. Despite these challenges, Block reported $5.62 billion in revenue in Q3 of 2023, with $44 million in profit from Bitcoin holdings.
Paypal is also cutting down the staff to keep the costs low. In a letter to the staff, CEO Alex Chriss said that the company's decision will affect around 2,500 employees, who will be notified about their fate between today and the end of the week.
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