Shares of Block Inc. surged more than 23% in late trading today after the financial services company announced that it was laying off more than 4,000 people from its approximately 10,000-person workforce alongside an earnings beat in its fiscal fourth quarter.

For the quarter that ended on Dec. 31, Block reported adjusted earnings per share of 65 cents, up from 47 cents in the same quarter of 2024, on revenue of $6.25 billion, up 3.6% year-over-year. The earnings figure came in ahead of the 64 cents per share expected by analysts, while Block’s revenue fell short of an expected $6.29 billion.

Block saw growth in two of its three revenue segments, as commerce enablement revenue rose 11% from a year ago, to $3.05 billion, and financial solutions revenue jumped 48%, to $1.222 billion. Conversely, the company’s bitcoin ecosystem saw revenue decline almost 20% year-over-year, to $1.98 billion amid a bear market for cryptocurrencies.

The company’s gross profit rose 24%. to $2.87 billion. It was boosted by a 33% increase in Cash App revenue driven by higher user engagement and conversion and a 12% increase in Square gross payment volume.

The specific figures were definitely not what investors were paying attention to, however, as Block Chief Executive Officer Jack Dorsey started the company’s Q4 2025 Shareholder Letter with the news of the layoffs.

They’re described as a restructuring designed to align Block’s organization with its operating model and long-term strategy. Dorsey said the company is reshaping itself around smaller, more focused teams intended to move faster and execute more efficiently, particularly as artificial intelligence becomes more embedded in its product development process.

The cuts are framed as a deliberate effort to raise performance standards and reduce organizational complexity. The shareholder letter emphasizes that Block wants to flatten its structure, clarify accountability and concentrate resources around its highest-priority initiatives across Square, Cash App and its broader ecosystem.

Dorsey also characterized the move as one focused on making Block a leaner, AI-native organization and that automation and improved tooling allow the company to operate effectively with fewer people.

“The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We’re already seeing it internally,” said Dorsey. “A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week.”

For its fiscal year 2026, Block is forecasting gross profit of $12.2 billion and adjusted earnings per share of $3.66. The latter figure came in ahead of the $3.22 expected by analysts.

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