Block Inc. shifts strategy through layoffs caused by organizational restructuring—accelerating Bitcoin business and payment integration

Jack Dorsey’s Block is planning to implement layoffs affecting up to 10% of its employees, amounting to several hundred people, as part of a major organizational restructuring. According to Bloomberg, this workforce adjustment is not merely a cost-cutting measure but a strategic review aimed at integrating product lines and improving operational efficiency.

Details of the Restructuring Plan Driving the Layoffs

Block’s layoff plan was revealed during its annual performance review process. According to Cointelegraph, this move suggests a deliberate overhaul of the organizational structure by management. As of November, Block had fewer than 11,000 employees, but approximately 10% of this scale could be affected moving forward.

The background of these layoffs includes a strong desire to streamline multiple business units. In particular, accelerating integration between Cash App and Square’s payment platforms necessitates organizational optimization. Simultaneously, resource reallocation among emerging businesses is underway, with management planning to focus investments on future growth areas.

Bitcoin Business and Payment Service Integration Strategy

While optimizing personnel through layoffs, Block continues to invest in promising future projects such as Bitcoin mining division Proto and artificial intelligence project Goose. The integration of Cash App and Square aims to strengthen the payment ecosystem and enhance service comprehensiveness for customers.

In November last year, Square introduced Bitcoin payment options for merchants, allowing businesses to accept BTC directly at checkout. This initiative has led to over 4 million merchants in eight countries using Square’s services. Additionally, merchants can convert a portion of their daily card sales into Bitcoin, expanding Square’s payment and wallet ecosystem.

Stock Market Reaction and Future Financial Outlook

Despite the news of layoffs, Block’s stock rose about 5% on Friday, suggesting that the market views this organizational restructuring as a move to strengthen the company’s long-term competitiveness. Based on data from Google Finance, investors seem to expect future profit improvements through increased efficiency.

Block is scheduled to announce its Q4 earnings on February 26. Analysts forecast that Q4 revenue will be approximately $6.25 billion, with an adjusted profit of about $403 million, or 68 cents per share. This outlook considers the previous quarter’s revenue of $6.11 billion, net profit of $461.5 million, and an 18% year-over-year increase in gross profit.

The previous quarter’s growth was supported by a 24% increase in Cash App and a 9% rise in Square, but some performance metrics fell short of Wall Street expectations, leading to a decline in stock price immediately after the announcement.

Bitcoin Revenue Fluctuations and Holdings

Bitcoin remains a significant revenue source for Block, though it is also highly volatile. In Q3, Bitcoin-related revenue was approximately $1.97 billion, down from $2.4 billion in the previous year. As of the end of September, Block held 8,780 BTC, with an asset value exceeding $1 billion, but recorded a quarterly impairment loss of $59 million.

How the upcoming restructuring, including layoffs, will impact the efficiency of Bitcoin operations remains a key point of market attention.