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The bloc’s decision to cut nearly 4,000 jobs, about 40% of its workforce, despite strong financial performance, has fueled debate in the tech sector about artificial intelligence and workforce productivity.
The parent company of Square and the Cash app reported a Q4 gross profit of $2.9 billion, up 24% year over year. Shares rose nearly 20% after the earnings release and news of workforce cuts.
According to Block CFO and COO Amrita Ahuja, the cuts were part of a larger strategic plan.
“We believe it is indeed from a position of strength that we are able to take such a move with confidence and execute in a way that continues to deliver to our customers and stakeholders,” Ahuja said. lucky In an interview last week.
“It’s been a two-year journey for us,” Ahuja said. “It wasn’t an overnight decision.”
A central element of this transformation is the company’s internal use of artificial intelligence. Block has built an internal AI agent, “Goose,” that sits on top of the larger language modules and automates tasks such as drafting communications, executing workflows and supporting product development. Some analysts have questioned whether the block reduction is really a result of AI-driven productivity gains or instead a market adjustment from hiring during the pandemic.
Tools are already influencing how work is completed within a company. Ahuja said developer productivity has increased as engineers rely on AI tools to speed up production of code and product features. In one example, an underwriting model that previously took an entire quarter to build was completed in a fraction of the time.
The amount of production also changed during this period, viz Ahuja referred to the company’s gross profit per employee metric.
Ahuja told Fortune that Block generated about $500,000 in gross profit per employee in 2019. That number remained relatively stable during the company’s hiring boom in the early 2020s, and recently increased to about $750,000 in 2024 and nearly $2025 million, the company said. Estimates, gross profit per employee will reach nearly $2 million by 2026.
The bloc raised its financial outlook at the same time it announced the layoffs. The company now expects gross profit to grow 18% year over year and profit to increase 54%.
Productivity metrics are getting new scrutiny as companies evaluate how automation and AI affect staffing levels and productivity. The Center for American Productivity and Quality shows that the average company generates about $310,000 in revenue per employee, with organizations in the 75th percentile averaging about $564,706 per employee.
Cost metrics are also gaining attention within finance organizations as automation takes shape in the finance function. APQC also found that personnel costs per financial function employee typically range from about $51,000 to $121,000 per financial employee, depending on staffing models, compensation levels and manual work performed throughout the financial processes.
Automation and artificial intelligence are increasingly seen as tools to manage these costs while maintaining productivity. Analysts have suggested that AI can enable organizations to change the relationship between labor costs and business performance, without adding equivalent headcount.
Block CEO Jack Dorsey said at X that the company was “over-hired during COVID” and pointed to rapid business expansion in lending, banking and buy-now, pay-later services during the period. After the layoffs, the market responded positively with share prices rising more than 20%, indicating that the potentially inevitable AI-induced layoffs may have created some negative pressure, but significant growth in share prices and high investor confidence among labor and equity markets.
Market reactions have also shifted focus to workforce productivity metrics. As automation continues to reshape corporate workflows, measures such as profit per employee and revenue per employee, along with other indicators used to evaluate labor productivity, may receive increasing scrutiny as companies evaluate staffing levels and operational efficiency.. In networking groups, mid-market CFOs also said they were conducting their own assessments work force And AI tools before making the hard cut.
Here is a list of major market events scheduled for the coming week.
Monday, March 9th – Nothing is set.
Tuesday, March 10th
Wednesday, March 11th
Thursday, March 12th
Friday, March 13th
Carl Gubitz, CFO of global immunology company Argenx, said the benefit gave the biotech more flexibility, while its approach to scaling focused on capabilities rather than headcount.
In the last section The CFO PodcastGubitz said the company aims to “scale capabilities, not scale the organization.” As Argenx moves into its next phase of growth, he said the company is relying heavily on external partners to support key financial activities. “Let’s keep it out of the company, let’s keep it flexible and let’s work with our partners.” The company’s three-person finance team supports operations in 20 countries through overseas partnerships, he said.
This model extends across financial operations. Internal audit and legal accounts are “100% outsourced,” Gubitz said, with tax work being largely outsourced and even forecasting and revenue modeling infrastructure being built and maintained overseas. The goal, he said, is to “invest in digitization opportunities and now look forward to trying to invest in AI and really trying to keep the company as small as possible.”
Hiring decisions follow the same order. With about 1,800 employees supporting a company with a market capitalization of about $50 billion, Gubitz said Argenx is taking a deliberate approach to expanding its headcount. “We haven’t hired (that many) people yet,” he said, adding that leadership is assessing what roles are needed as AI and digital tools reshape how we work.
Gubitz also explained how profitability changes a company’s financial position. “We don’t need to go back to the street like we used to every year to raise funds from the street,” he said. He added that commercialization revenue now supports long-term investment and operational stability.
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