Block shares surged as much as 24% in extended trading after the payments company announced plans to cut more than 4,000 jobs — nearly half of its workforce.

The company confirmed it will reduce headcount from over 10,000 employees to just under 6,000. The restructuring was announced alongside its fourth-quarter earnings results.

Co-founder and CEO Jack Dorsey described the move as a proactive decision aimed at positioning the company for its next phase of growth. In a letter to shareholders, he said the company chose to act decisively rather than implement multiple rounds of layoffs over time.

Chief Financial Officer Amrita Ahuja said the restructuring would enable Block to operate with smaller, more specialised teams, while increasingly leveraging artificial intelligence to automate work.

The company expects to incur restructuring charges of between $450 million and $500 million, primarily related to severance, employee benefits and share-based compensation. Most of these charges are expected to be recorded in the first quarter.

Investors appeared to welcome the move. After jumping as much as 24% in after-hours trading, Block shares remained up nearly 18% in premarket trading the following day.

The announcement came as Block reported adjusted earnings per share of 65 cents on revenue of $6.25 billion for the fourth quarter, broadly in line with analyst expectations. Gross profit rose 24% year-on-year to $2.87 billion.

For the full year, Block projected adjusted earnings per share of $3.66, ahead of analyst forecasts of $3.22.

The job cuts reflect a broader trend among technology companies recalibrating their workforce strategies as artificial intelligence reshapes operational structures. Firms including Pinterest, CrowdStrike and Chegg have recently announced reductions tied to AI-driven efficiency gains.

Dorsey indicated he expects many companies to undergo similar structural changes over the next year as productivity tools based on AI become more deeply integrated into business operations.

Despite the short-term restructuring costs, markets appear to be focusing on Block’s cost discipline and earnings outlook — viewing the cuts as a reset designed to protect margins and accelerate automation-led productivity gains.