Block, the fintech company whose subsidiaries include Square, Cash App and Afterpay, is laying off staff at a tumultuous time for tech workers.
This according to an internal memo from CEO Jack Dorsey, taken first from Business Insider, which reports that “its growth [Block] has far outpaced the growth of … business and revenue’.
The layoffs were implemented this morning and affected staff at Cash App, Block’s fundamentals and square arms. About 1,000 people – or 10% of Block’s workforce – were reportedly affected.
“We decided it would be best to do so immediately rather than arbitrarily separate them, which did not seem fair to the individuals or the company,” Dorsey said in the memo to Block staff. “When we know we need to take action, we want to do it right away, rather than let things sit forever.”
The layoffs are no surprise. Block said in an earnings call last year that it would cut its headcount from 13,000 in the third quarter of 2023 to an “absolute limit” of 12,000 by the end of this year.
But they add to a sense of malaise in the fintech sector and the wider technology sector, which has seen tens of thousands of workers walk out in recent weeks.
Just today, PayPal said it would lay off about 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 that offers cash management software for businesses, let 14 employees go, leaving the company with about a third of its former workforce.
Block’s suffered a rough year and a downward trending turnover.
Revenue from Cash App, the peer-to-peer payment service, has denied abruptly. Meanwhile, the buy now, pay later service Afterpay, which Block acquired in 2021 for $29 billion, has published serious losses. Block’s Bitcoin revenue has decreased accordingly fall to the price of the cryptocurrency last year (although this has recovered recently). And Square faces growing competition on multiple fronts, including Fiserv’s Clover, Toast and Stripe.
Investors are unhappy. Square’s stock fell about 30% from January 2023 to October as Block founder Dorsey took the reigns from former Square chief Alyssa Henry.
Block’s recent efforts to revitalize the business include adding productive AI capabilities to Square, acquiring music-focused fintech startup Hifi, and launching a Bitcoin wallet, Bitkey, in the form of a mobile app and hardware store.
Block reported revenue of $5.62 billion for the third quarter of 2023, with $44 million in profits from its Bitcoin holdings.
