Analysis: Block’s retreat to 2019 scale could be a hint of deeper shifts in payments economics

While Jack Dorsey cites AI-enabled productivity gains arsenic the crushed for Block's cuts, the deeper displacement is successful payments plumbing: stablecoin colony threatens to compress the interest stack that fintech acquirers person relied connected for years.

Feb 27, 2026, 4:44 a.m.

Fintech institution Block is shrinking backmost toward its pre-pandemic size, cutting unit to astir 6,000 from a Covid-era highest of implicit 10,000, compared with conscionable 3,800 successful 2019.

CEO Jack Dorsey says AI allows smaller teams to determination faster. While that's surely true, the deeper reset whitethorn bespeak a tougher reality: stablecoin rails are apt opening to compress the card-based fees that fueled the company’s expansion.

Block built its concern connected a payments strategy that charges merchants a percent of each swipe. Stablecoins endanger to crook that percent into pennies, shrinking the economical pastry that acquirers and card-linked fintechs divide. That shift, much than headcount discipline, whitethorn specify the company’s adjacent chapter.

A caller enactment from Citrini Research titled “When Friction Went to Zero” argues that the emergence of agentic buying — wherever AI assistants autonomously comparison prices, optimize outgo routes, and execute transactions connected behalf of users — could accelerate the displacement distant from paper networks and toward stablecoin rails.

In that environment, colony happens successful seconds astatine near-zero cost, and machines prioritize terms and velocity implicit marque loyalty oregon checkout design.

The 2% to 3% merchant interest that sustains the accepted payments stack becomes harder to warrant erstwhile an AI cause tin way the aforesaid transaction for pennies, leaving companies similar Block exposed to structural borderline compression alternatively than impermanent competitory pressure.

This is not Block’s archetypal effort astatine resizing. In aboriginal 2024, the institution began cutting unit nether a antecedently disclosed program to trim headcount by arsenic overmuch arsenic 10%, capping its workforce astatine 12,000 aft ballooning to astir 13,000 successful 2023.

At the time, Dorsey acknowledged that “the maturation of our institution has acold outpaced the maturation of our concern and revenue,” framing the determination arsenic a correction to pandemic-era implicit expansion.

The latest reduction, acold deeper astatine astir 40%, suggests the recalibration is nary longer conscionable astir aligning costs with revenue, but astir adjusting to a payments scenery wherever interest compression could beryllium structural.

Investors cheered the move, sending Block shares up much than 23% successful after-hours trading arsenic the marketplace rewarded the assertive outgo reset. Even so, the banal remains astir 80% beneath its pandemic-era peak, underscoring however acold expectations person reset since the hiring boom.

Stablecoins already existed during that expansion, but they were mostly viewed arsenic crypto trading instruments alternatively than a credible payments threat.

Only recently, with regulatory clarity advancing done measures similar the GENIUS Act and Circle’s IPO elevating stablecoins into the mainstream fiscal system, person dollar-backed tokens begun to look similar a plausible alternate to the card-based rails that underpin Block’s business.

“Maybe Block laying disconnected a ton of employees is simply a motion that AI is gonna destruct everything," fiscal expert Ben Carlson, manager astatine Ritholtz Wealth Management, posted connected X.

"Or possibly the banal is down 80% from the highs and they overhired and AI is simply a convenient excuse,” helium wrote.

World Liberty Financial ties voting powerfulness to staking arsenic USD1 proviso tops $4.7 Billion

The connection redirects stablecoin arbitrage from organization marketplace makers to ample token holders and links voting rights to superior commitment.