New York, Feb 27, 2026, 18:24 ET — After-hours
- Block shares jumped on Friday after the payments firm outlined a sweeping workforce overhaul tied to AI tools.
- The company raised its 2026 profit targets and gave a stronger first-quarter outlook.
- Investors’ next read comes from management comments at a Morgan Stanley tech conference on March 3.
Block (XYZ.N) shares ended Friday up 16.8% at $63.68, extending a two-day rally after the company said it plans a deep workforce cut and lifted its 2026 profit targets. The stock gained about 5% on Thursday. 1
The move matters because Block has been under pressure to show it can keep growth in Cash App and Square while widening margins. A cut this large, with AI as the explicit reason, is the kind of headline that can reset near-term expectations fast.
It also lands heading into a new week. Traders will test whether Friday’s repricing holds once the layoff plan turns into execution details — who stays, what slows, and what gets fixed first.
Block said it will lay off more than 4,000 employees, roughly 40% of its workforce, as it leans harder on artificial intelligence to run leaner teams. The company runs Square, the merchant payments business, and Cash App, its consumer finance app. 2
In a shareholder letter filed with the SEC, Block raised its 2026 gross profit target to $12.2 billion and forecast adjusted operating income — a profit measure that strips out some one-off items — of $3.2 billion, or a 26% margin. It projected first-quarter gross profit of $2.8 billion and adjusted operating income of $600 million, and said the workforce shift should start to show up in profits in the second quarter, with the full impact in the second half. Block said fourth-quarter gross profit rose 24% to $2.872 billion; Cash App monthly transacting actives reached 59 million and Square gross payment volume, the value of payments processed, grew 10%. 3
That’s the crux for investors: does a smaller Block move faster, or just smaller. Gross payment volume (GPV) at Square signals how hard merchants are using the platform, while Cash App’s active users point to day-to-day engagement and, ultimately, monetization.
Analysts leaned into the margin story. Evercore ISI wrote the change could free up cash flow for “higher ROI” bets, while Hargreaves Lansdown’s Matt Britzman called it a mix of AI efficiency and an overdue “clean-up of corporate bloat.” J.P. Morgan analysts said the cut could lift gross profit per employee and leave Block ahead of peers including Visa, and Reuters noted the stock was on pace for its biggest one-day rise since November 2022. 4
But the downside case is obvious enough. Cutting this deep can disrupt product launches, raise operational risk, and stretch controls in areas like lending and fraud — exactly where mistakes get expensive.
Next week’s focus shifts from the headline to the math: how quickly savings show up, and what it costs to get there. Any sign that customer service or merchant tools are slipping could cool the trade.
The next scheduled catalyst is already on the calendar. Block is set to present at the Morgan Stanley Technology, Media & Telecom Conference on March 3, with a webcast slated for 2:30 p.m. ET. 5
