Excellent performance, excellent profits... then why is this company about to lay off 4,000 employees?
Surprisingly, the company's shares jumped by nearly 25% during trading after this announcement. This indicates that investors viewed this move as a strategy to control costs and increase efficiency.
Layoffs at any company are typically considered a sign of poor performance or financial pressure. This creates concern among investors and insecurity among employees. However, the picture is different in the case of digital payments company Block, Inc. Despite strong financial performance, the company has decided to lay off more than 4,000 employees. The company announced that it will reduce its total workforce of approximately 10,000, reducing its staff number to approximately 6,000.
No disappointment despite the layoffs
Surprisingly, the company's shares jumped by nearly 25% during trading after this announcement. This suggests that investors viewed this move as a strategy to control costs and increase efficiency. In his message, the company's Chief Executive Officer, Jack Dorsey, clarified that this decision was not made due to any financial crisis.
He stated that the company's average profit and total profits have been steadily increasing, but a change in organizational structure was felt necessary. The primary reason behind this major decision is the widespread incorporation of artificial intelligence (AI) into operations.
The Impact of AI
The company states that intelligence tools have transformed the way businesses operate, and even small teams are able to work more efficiently with these tools. In a statement on X, Dorsey said that the company preferred to make a major decision at one time rather than repeatedly making smaller layoffs, so as not to create uncertainty and a lack of trust within the organization.
This development demonstrates that layoffs today are not always a sign of crisis; rather, they can sometimes be part of technological change and future strategy.
