Block Initiates New Round of Layoffs: Details of the Severance Package for US Employees

A New Wave of Workforce Reductions at Block

Fintech company Block, led by CEO Jack Dorsey, has initiated another round of layoffs. The company began notifying affected employees on Wednesday that their roles were being eliminated, though the total number of staff impacted by this latest reduction remains unclear. A spokesperson for the company has declined to provide comments on the situation.

This development follows an earlier, more extensive round of layoffs in February, during which the company cut more than 40% of its workforce. While the February reductions were attributed in part to the capabilities of artificial intelligence, the company’s messaging regarding the current cuts has shifted. In recent communications, Block cited the goal of “using better tools to handle routine tasks” and the intent to refocus team efforts on “complex cases and decisions.”

Breakdown of the Severance Package

According to an internal FAQ document reviewed by media, US employees impacted by these latest cuts are eligible for a specific severance structure. The package includes at least 60 days of pay, supplemented by a minimum of seven weeks of base salary. For every year an employee has worked at the company, they are entitled to an additional week of pay.

Furthermore, employees who choose to sign and adhere to a separation agreement will receive an additional 30 days of pay without the requirement to work, bringing the total to 90 days of pay. These individuals are also eligible for a one-time $5,000 payment, which the company has designated as transition assistance. Regarding healthcare, the company is providing three months of COBRA premium coverage for affected US workers and their enrolled dependents.

The document also notes that eligible employees will receive a prorated payment to account for an April 2027 retention bonus. For staff members located outside of the United States, the company indicated that severance packages would vary based on their specific geographic location.

Comparing Benefits to Previous Reductions

The current severance terms differ in several ways from the package offered during the significant February layoffs. In the previous round, Block provided 20 weeks of salary plus one additional week for each year of tenure. While the current combination of 90 days of pay and the seven-week minimum severance is roughly equivalent to the February base offer, there is a notable change in healthcare support. The February package included six months of healthcare coverage, whereas the current offer provides three months of COBRA premiums.

The $5,000 transition assistance payment remains a consistent feature across both rounds of layoffs this year.

Broader Context in the Tech Sector

Block’s latest move occurs against a backdrop of ongoing workforce adjustments across the technology industry. Other firms have recently announced similar restructuring efforts. Canva, for instance, reported that it would reduce its workforce by 22%, with affected staff receiving at least six months of pay. Similarly, Squarespace announced a 19% reduction in staff, offering those employees at least 16 weeks of base pay, additional tenure-based compensation, and benefits extending through May of next year.

The layoffs at Block come despite the company reporting third-quarter profits that exceeded expectations, driven by growth in its Square seller-services business and its Cash App consumer financial services platform.

Source: businessinsider.com