Block Inc. (XYZ) Shares Jump 25% After AI Pivot and 4,000 Layoffs, Raises Q1 Guidance

Block Inc. (XYZ) shares jumped 25% in afterhours trading on the NYSE on Feb. 26 after CEO Jack Dorsey announced an AI pivot and the layoff of 4,000 employees, a roughly 40% reduction lowering headcount from about 10,000 to under 6,000, The Market Periodical reports. The company issued stronger-than-expected Q1 2026 guidance, projecting operating profit of $600 million versus an estimated $574 million and gross profit of $2.8 billion against $2.72 billion, and reported Cash App monthly active users above forecasts while raising full-year gross profit guidance. Block has been overhauling its structure and workforce since 2024 and increasing investment in artificial intelligence to improve operational efficiency, including work on an in-house AI tool called Goose, according to The Market Periodical. Dorsey outlined severance terms of 20 weeks of salary, six months of health insurance and an additional $5,000 for affected staff, while separate commentary from Bull Theory said the company spent approximately $68 million on a September 2025 corporate event and later cut around 4,000 roles.