In a surprising turn of events, Block, the fintech corporation led by Twitter co-founder Jack Dorsey, has announced major layoffs. The company, which has several subsidiaries including Square, Cash App, and Afterpay, is laying off employees in large numbers.

The layoffs come as a result of the company’s growth outpacing its business and revenue growth. Approximately 1,000 employees were affected, impacting the Cash App, Foundational, and Square divisions. This accounts for 10% of its workforce.

The decision to lay off employees was not taken lightly. In an internal memo, Dorsey acknowledged the confidence of the teams in their direction and the readiness of the company to take the decision. He stated, “All of these teams were confident in the direction they’re taking, and were ready to take action within the next 2-3 weeks”.

Block faced a challenging year as its revenue from Cash App, Afterpay, and Bitcoin declined. Its subsidiary, Square, also faced tough competition. To address these challenges, Block introduced generative AI to Square, acquired Hifi, a fintech startup focused on music, and launched Bitkey, a self-custody Bitcoin wallet.

Despite these challenges, Block reported $5.62 billion in revenue in Q3 of 2023, with $44 million in profit from Bitcoin holdings. However, the layoffs indicate a strategic shift in the company’s operations and a focus on leaner, more efficient business practices.