Block announced plans to reduce its workforce by roughly half, eliminating more than 4,000 positions as the payments technology company restructures around artificial intelligence-driven operations.

CEO Jack Dorsey described the layoffs as a strategic move, not a sign of trouble. He said making all the cuts at once would give the company more clarity as it shifts to AI. The workforce will drop from about 10,000 to just under 6,000 people.

Employees who are leaving will get 20 weeks of base pay, plus one extra week for every year they worked at Block. Their equity will vest through the end of May. They will also keep their company devices, get six months of health coverage, and receive a $5,000 transition payment.

Dorsey said some of the company’s growth came from choices made during the pandemic, when Block set up two separate structures: one for its small business payments and another for its consumer financial app. The company started merging these in mid-2024. Block also became more complex as it moved into lending, banking, and buy-now, pay-later services.

Dorsey said Block will use AI throughout its business, from product development to workflows and customer service. He added that smaller teams working with AI tools will change how the company runs.

Investors reacted strongly to the news. Block’s stock jumped 17% on Friday morning and is up about 22% over the past week, though it is still slightly down for the year.