Fintech company Block is set to overhaul its internal reporting structure, founder and CEO, Jack Dorsey, told staff in an internal memo.
Key Takeaways
- Block is about to reorganise its entire internal reporting structure, the company’s founder and CEO Jack Dorsey told staff in an internal memo, obtained by Fortune. He says the move may feel “big and disruptive or uncomfortable”.
- The announcement comes a week before Block reports its latest quarterly earnings – and just after the S&P 500 posted its worst day since 2022.
- The changes are expected to address what Dorsey says are Block’s three key problem areas: “collaboration, craft and flexibility”.
- Block’s share price has tanked around 8% this week, to US$94.10 (at the time of writing). That’s its lowest point this year.
Key background
Fintech company Block, which owns payment services Cash App, Square and Afterpay, has been conducting rounds of lay-offs since the end of last year. In December 2023, it axed about 40 staff working at the company’s music-streaming app, Tidal. In January this year, it got rid of a “large number” of teammates throughout Cash App, Foundation and Square, though the exact amount was not specified. Reports estimated the number was close to 1,000. That wasn’t the last of the job cuts either: in February, it was reported Block planned to cut a further 112 jobs starting March 30.
And in May, US federal prosecutors revealed they were looking into internal practices at Block, after a former employee alleged widespread compliance lapses at Square and Cash App. According to NBC, most of the transactions discussed with prosecutors around credit card transactions, dollar transfers and Bitcoin were not reported to the government as required.
Big number
42,324. That’s how many staff have been laid off in 2024 as of April, according to reports. That’s compared to 262,682 staff that were laid off in 2023, and 164,969 in 2022.
Tangent
Last month, Block announced it would begin putting 10% of Cash App’s gross profit from bitcoin products into bitcoin purchases. That comes as the company’s products generated 3.3% and 4.2% of Block’s gross profit in 2022 and 2023. At the end of Q1, 2024, Block had invested US$573 million into bitcoin.
The price of Bitcoin was $101,446 (at the time of writing), which is up 52% this year so far. Cathie Wood, CEO of Ark Invest, forecast bitcoin could reach $US1.48 million by 2030 – and that it would hit the $US1 million dollar-mark earlier.
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