New York, Feb 27, 2026, 18:24 ET — After-hours
- Block shares surged Friday, with the payments company laying out a major workforce overhaul linked to AI tools.
- The company bumped up its 2026 profit targets and signaled a more upbeat first-quarter outlook.
- Management’s upcoming remarks at the Morgan Stanley tech conference, set for March 3, give investors their next update.
Block (XYZ.N) surged 16.8% to close at $63.68 on Friday, piling on gains from Thursday’s roughly 5% jump. The two-day run came after the company outlined sweeping job cuts and raised its profit outlook for 2026.
Block’s been facing pressure to prove it can keep Cash App and Square growing while pushing margins higher. Announcing such a steep cut—citing AI as the driver—throws a headline out there that can shift near-term expectations in a hurry.
The timing coincides with a new week. Now traders will see if Friday’s repricing sticks when the layoff plan starts taking shape — who’s out, which projects decelerate, and what’s prioritized for fixes.
Block plans to cut over 4,000 jobs—about 40% of its staff—citing a greater reliance on artificial intelligence to streamline operations. The company operates Square, which handles merchant payments, along with its consumer-facing Cash App.
Block hiked its 2026 gross profit target to $12.2 billion in a shareholder letter filed with the SEC, and now sees adjusted operating income at $3.2 billion—a 26% margin once you cut out certain one-offs. For the first quarter, the company is looking for $2.8 billion in gross profit and $600 million in adjusted operating income. The workforce changes, Block said, should begin to boost profits in the second quarter, with the bigger effect landing in the back half of the year. In the fourth quarter, gross profit climbed 24% to $2.872 billion. Cash App posted 59 million monthly transacting actives, while Square’s gross payment volume—the total value processed—rose 10%.
The question for investors boils down to this: will a leaner Block pick up speed, or simply shrink? Square’s gross payment volume (GPV) highlights merchant activity on the platform. On the flip side, Cash App’s active user count shows ongoing engagement—and crucially, the potential to make money off those users.
Margin talk dominated analyst notes. Evercore ISI pointed to improved cash flow that could fund “higher ROI” moves. Hargreaves Lansdown’s Matt Britzman called it both an overdue “clean-up of corporate bloat” and a nod to AI-driven efficiency. J.P. Morgan flagged the potential for higher gross profit per employee, with Block possibly leapfrogging peers like Visa. Reuters added that the stock was heading toward its biggest single-day jump since November 2022. Reuters
The risks are clear. Slashing staff to this extent threatens to derail product launches, loosen oversight in lending or fraud, and increase operational hazards — all costly places for slip-ups.
Next week, the spotlight moves to the numbers—specifically, the pace of realized savings and the price tag attached. If evidence surfaces that customer service or merchant tools are faltering, traders may think twice.
Investors are eyeing Block’s upcoming appearance at the Morgan Stanley Technology, Media & Telecom Conference, scheduled for March 3. The company’s presentation will be webcast at 2:30 p.m. ET.
