Block layoffs in 2024 are the latest fintech layoffs of this year. Block, the fintech conglomerate synonymous with brands like Square, Cash App, and Afterpay, recently made waves with a strategic decision that’s sending ripples through the tech industry—a significant reduction in its workforce. In an internal memo, CEO Jack Dorsey outlined the reasoning behind this move, shedding light on the intricacies that led to this pivotal decision.
As articulated by Dorsey, the crux of the matter lies in the staggering pace of Block’s overall growth, which, paradoxically, has outpaced the growth of its business and revenue streams. This misalignment prompted a meticulous evaluation of the company’s structure, culminating in the decision to streamline its workforce.
Block layoffs 2024 explained
The Block layoffs 2024, executed with a surgical precision that affected staff across various arms of Block, including Cash App, foundational, and Square divisions, impacted approximately 1,000 employees – constituting a substantial 10% of Block’s overall headcount. In the internal note, Dorsey justified the swift and comprehensive action, stating, “We decided it would be better to do at once rather than arbitrarily space them out, which didn’t seem fair to the individuals or the company.”
While the Block layoffs weren’t entirely unforeseen, given Block’s prior commitment to reducing its headcount from 13,000 in Q3 2023 to an “absolute cap” of 12,000 by the close of 2024, they add a layer of complexity to the broader narrative of challenges faced by the fintech and tech sectors. Recent announcements of workforce reductions by major players like PayPal and Brex underscore the pervasive uncertainties in the industry.
Delving into the specific challenges Block encountered over the past year provides a nuanced understanding of the decision. The revenues from its flagship Cash App, a peer-to-peer payments service, witnessed a notable decline. Afterpay, a significant acquisition made by Block in 2021 for a whopping $29 billion, reported substantial losses. Block’s Bitcoin revenue mirrored the tumultuous ride of the cryptocurrency market, facing a decline in tandem with the broader trend – though recent market improvements have injected a measure of optimism. Meanwhile, Square, Block’s subsidiary, grapples with intensifying competition from formidable rivals such as Fiserv’s Clover, Toast, and Stripe.
Investor sentiment has mirrored these challenges, with Square’s stock experiencing a notable retreat of around 30% from January 2023 to October, coinciding with Dorsey’s transition to the helm from ex-Square head Alyssa Henry.
Block’s proactive measures to reinvigorate its business amid these headwinds include integrating generative AI features into Square, acquiring the music-focused fintech startup Hifi, and launching Bitkey, a self-custody Bitcoin wallet available in both mobile app and hardware storage formats.
In the face of these challenges and strategic adjustments, Block reported $5.62 billion in revenue for the third quarter of 2023, accompanied by a $44 million profit from its Bitcoin holdings. As the company navigates these intricate waters, the emphasis remains on striking a delicate balance between innovation and resilience in a continually evolving tech landscape.
Latest fintech layoffs
2024 has emerged as a pivotal year marked by strategic shifts, challenges, and a notable recalibration of workforce dynamics. Fintech, renowned for its rapid innovations and disruptions, now finds itself at a crossroads with the announcement of significant layoffs across various key players, such as:
- The Paypal layoffs 2024 continue with 2,000 employees of the company, announced by the company same day with Block.
- Salesforce is reportedly reducing its workforce by approximately 700 employees, constituting roughly 1% of its global staff.
- Cova, a Nigerian fintech startup, is said to be closing its operations on February 10, 2024, attributing the decision to “several factors.” Co-founders Oluyomi Ojo and Yomi Osamiluyi communicated to users through email, assuring them that subscription refunds will be completed by February 13, 2024, according to Benjamindada.
- Despite notable successes for its business during the instability of the 2023 banking crisis, fintech startup Brex is reducing its workforce by 20 percent, amounting to 282 employees.
Featured image credit: Block