Jack Dorsey’s payments company Block, which powers the point-of-sale software on many iPad checkout screens, told its staff this week that up to 10% will be laid off in the coming months, according to a report.
CEO Dorsey announced the workforce reduction in a company-wide memo. obtained by Business Insiderwhere he also admitted that spending at the company, which operates the popular commercial payments platform Square, “is not sustainable.”
“Square’s headcount has far outpaced our growth and performance,” Dorsey added even though the company has seen a three-fold increase in profits over the past four years.
“In fact, I think it’s holding us all back and frustrating us all. Which is not fair to all of you or to our clients,” added the 46-year-old technology mogul.
In the latest quarter, Square, whose software has drawn attention for its seemingly ubiquitous tip requests, processed up to $46.22 billion in transactions (the equivalent of $513 million a day) and earns up to 3.5% plus a fifteen%. penny fee depending on whether customers use contactless payment or a virtual terminal.
On Block’s third-quarter earnings call last week, Chief Financial Officer Amrita Ahuja said the company’s headcount currently stands at just over 13,000 people, slightly more than the 12,400 workforce Block said it had in place. a filing with the Securities and Exchange Commission in late 2022.
The roughly 600 employee increase Block has experienced so far this year was to fill engineering positions, according to Insider.
However, an upcoming 10% reduction could mean that up to 1,300 Block employees get layoff notices.
A person familiar with the company told Insider that more than 1,000 employees will lose their jobs.
Dorsey said his workforce “will be smaller than we are today by the end of next year,” which he plans to achieve “through performance management, the scope of our work and restructuring to eliminate duplication and redundancy.” “, according to the memo obtained by Insider.
Dorsey, who also founded Twitter and Cash App, continued: “Therefore, we will not take a single action, but rather we will look critically at everything we are doing and act thoughtfully.”
He also noted in the message that it would be “perfectly reasonable” for employees who wanted to resign amid news of the downsizing, to which Dorsey said he would “rather we provide the information than work secretly in the dark.”
In its message to shareholders Following the release of its third-quarter earnings report last week, when Block posted $5.62 in revenue and a 21% year-over-year increase in profits to $1.9 billion, Dorsey said he is putting “an absolute limit” on the Number of employees. she would have.
That limit will “remain firm at 12,000 people until we feel that business growth has significantly outpaced company growth. We know that the opposite is true today,” added the 46-year-old technology magnate.
Block representatives declined to comment beyond the company’s letter and conference call.
Here’s the full memo Dorsey sent to Block’s workforce, according to Insider: As I said in my note to Block, the growth of our company has far outpaced the growth of our business and our revenue.
It is not sustainable. And the number of people at Square has far outpaced our growth and performance. In fact, I think it’s holding us all back and frustrating us all. Which is not fair to all of you or our customers.
Therefore, Square will be smaller than we are today by the end of next year. We will do this by managing performance, defining the scope of our work, and restructuring to eliminate duplication and redundancy. Therefore, we will not take a single action, but will look critically at everything we are doing and act thoughtfully.
I also think it’s important to be honest and transparent about all of this, so everyone can make their own decisions if necessary. You may not be prepared for the uncertainty or reduction of our team and want to leave. That’s perfectly reasonable. But I’d rather we provide the information than work secretly in the dark.
Everything Square-core and I do will be done with transparency and simple reasoning that you will have access to. You may not agree with our decisions, but we will do our best to explain why we believe they are correct.
Thank you all,
Jacob
