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

• Block is slashing its workforce to about 6,000 employees, down nearly 40% from 2023 levels and close to its pre-pandemic size, as investors reward a sharp cost reset.
• While Jack Dorsey cites AI-enabled efficiency for the cuts, the deeper challenge is that stablecoin-based payment rails threaten to compress the card fees that long powered Block’s growth.
• As AI “agentic shopping” and regulatory advances make stablecoins more viable for everyday payments, Block faces structural margin pressure even as its stock remains about 80% below its pandemic-era peak.

Fintech company Block is shrinking back toward its pre-pandemic size, cutting staff to about 6,000 from a Covid-era peak of over 10,000, compared with just 3,800 in 2019.

CEO Jack Dorsey says AI allows smaller teams to move faster. While that's certainly true, the reset may reflect a tougher reality: stablecoin rails are likely beginning to compress the card-based fees that fueled the company’s expansion.

Block built its business on a payments system that charges merchants a percentage of every swipe. Stablecoins threaten to turn that percentage into pennies, shrinking the economic pie that acquirers and card-linked fintechs divide. That shift, more than headcount discipline, may define the company’s next chapter.

A recent note from Citrini Research titled “When Friction Went to Zero” argues that the rise of agentic shopping — where AI assistants autonomously compare prices, optimize payment routes, and execute transactions on behalf of users — could accelerate the shift away from card networks and toward stablecoin rails.

In that environment, settlement happens in seconds at near-zero cost, and machines prioritize price and speed over brand loyalty or checkout design.

The 2% to 3% merchant fee that sustains the traditional payments stack becomes harder to justify when an AI agent can route the same transaction for pennies, leaving companies like Block exposed to structural margin compression rather than temporary competitive pressure.

This is not Block’s first attempt at resizing. In early 2024, the company began cutting staff under a previously disclosed plan to reduce headcount by as much as 10%, capping its workforce at 12,000 after ballooning to roughly 13,000 in 2023.

At the time, Dorsey acknowledged that “the growth of our company has far outpaced the growth of our business and revenue,” framing the move as a correction to pandemic-era over expansion.

The latest reduction, far deeper at nearly 40%, suggests the recalibration is no longer just about aligning costs with revenue, but about adjusting to a payments landscape where fee compression could be structural.

Investors cheered the move, sending Block shares up more than 23% in after-hours trading as the market rewarded the aggressive cost reset. Even so, the stock remains roughly 80% below its pandemic-era peak, underscoring how far expectations have reset since the hiring boom.

Stablecoins already existed during that expansion, but they were largely viewed as crypto trading instruments rather than a credible payments threat.

Only recently, with regulatory clarity advancing through measures like the GENIUS Act and Circle’s IPO elevating stablecoins into the mainstream financial system, have dollar-backed tokens begun to look like a plausible alternative to the card-based rails that underpin Block’s business.

“Maybe Block laying off a ton of employees is a sign that AI is gonna destroy everything," financial analyst Ben Carlson, director at Ritholtz Wealth Management, posted on X.

"Or maybe the stock is down 80% from the highs and they overhired and AI is a convenient excuse,” he wrote.

• Large bitcoin ETF holders and corporate treasuries are aggressively buying six- and 12-month put options at $60,000 or below as insurance against a potential price drop, Deribit said.
• Open interest in $60,000 bitcoin puts on Deribit has climbed to about $1.5 billion, the highest across all strikes and expiries,

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