Jack Dorsey's mea culpa after Block layoffs: 'We overhired'

Jack Dorsey says Block's massive layoffs stem from a COVID-era overhiring mistake. Joe Raedle/Getty Images 2026-02-27T10:19:28.739Z Share Copy link Email Facebook WhatsApp X LinkedIn Bluesky Threads lighning bolt icon An icon in the shape of a lightning bolt.

Impact Link Save Saved Read in app This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. Jack Dorsey said Block overhired during COVID after building two company structures. Block slashed nearly half its workforce in a single sweeping round of layoffs on Thursday. Dorsey said AI and smaller teams are driving a 'new way of working.' Jack Dorsey is taking responsibility for a key mistake behind Block's sweeping job cuts. "Yes we over-hired during COVID," the Block cofounder and CEO wrote Friday on X, responding to criticism that the company's recent layoffs reflected managerial incompetence.The admission comes a day after Dorsey announced he was slashing nearly half of Block's workforce — reducing head count from more than 10,000 employees to just under 6,000 in one of the most dramatic single-round layoffs in recent tech history. In his latest X post, Dorsey said the overhiring stemmed in part from a structural misstep. He had built "2 separate company structures (square & cash app) rather than 1," he wrote, a setup the company corrected in mid-2024, he said.yes we over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024. but this misses all the complexity we took on through lending, banking, and BNPL. and that we’re now targeting $2M+ gross… https://t.co/uaKgTdzGob— jack (@jack) February 27, 2026 That duplication inflated head count as Block expanded aggressively during the pandemic. Every time Thibault publishes a story, you'll get an alert straight to your inbox! Stay connected to Thibault and get more of their work as it publishes. Sign up By clicking "Sign up", you agree to receive emails from Business Insider. In addition, you accept Insider's Terms of Service and Privacy Policy. But Dorsey said critics were oversimplifying the situation. Over the past several years, Block also took on significant operational complexity, expanding into lending, banking, and buy-now, pay-later products, he said.Block is now targeting more than $2 million in gross profit per employee — roughly four times its pre-COVID efficiency, which Dorsey said remained flat at about $500,000 per person from 2019 through 2024. "We have and do run an efficient company… better than most," he wrote.Dorsey later reposted an X post in which a user said there was "very little evidence" that Block was "bloated." Very little evidence that $XYZ was 'bloated' based on the metrics below https://t.co/agIxz5DpKP— Bob's Payment Stock Substack (@bobspaysubstack) February 26, 2026 At Thursday's close, Block's share price was roughly $54, virtually flat compared to its price in 2018, seven years ago.The layoff announcement looks set to push the stock higher, with premarket trading suggesting a surge to $64 at Friday's open. The stock spiked from less than $75 pre-COVID to over $275 in early 2021, before dropping sharply at the end of that year. Since early 2022, the stock has traded at below $100 per share.In the original memo announcing the cuts, Dorsey said he chose to make one large reduction rather than conduct repeated rounds of layoffs, which he called "destructive to morale." He said that the business itself is strong, with gross profit growing and profitability improving.Instead, he pointed to what he described as a fundamental shift in how companies operate to justify the layoffs. Intelligence tools and smaller, flatter teams are enabling "a new way of working," he wrote, one that changes what it means to build and run a company.Several other tech companies — including Amazon, eBay, Meta, and Workday — have also announced cuts in recent months, often citing AI-driven efficiency gains and organizational streamlining. Last September, Micha Kaufman, the CEO and founder of Fiverr, announced a 30% workforce cut, citing the need to help turn Fiverr into a leaner, faster "AI-first company.""If you don't ensure that you sharpen your knives, you're going to be left behind. It's that simple," Kaufman told Business Insider last May.