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In recent years, the financial technology sector has been making bank. Between 2018 and 2023, the rapidly growing “fintech” industry rose to over $39 billion in revenue, with projections to hit over $1.5 trillion by 2030.
Fintech is a sweeping industry that offers money tech to financial institutions or individual users — and increasingly crypto services, itself a multi-billion dollar trade.
But with crypto comes risk. A lot of risk. Despite some fintech tycoons’ promises that crypto will enable “infinite growth,” companies are brushing up against the limits of blockchain hype faster than they anticipated.
The latest among them is Block, the financial service conglomerate owned by Twitter cofounder Jack Dorsey. Block encompasses massive fintech platforms like Cash App and Square, as well as more boutique crypto outfits like Bitkey, a digital crypto wallet started in 2023.
Now the company is seeing brutal cuts. In an email titled “smaller block,” according to TechCrunch, the company’s billionaire CEO announced the layoffs of 931 Block employees, or about 8 percent of the company’s total staff.
“hi all,” the hip all-lowercase message opens, dripping in authenticity the way only a CEO’s email can. “today we’ll be making some org changes, including eliminating roles and beginning the consultation process in countries where required.”
Dorsey proceeds to announce immediate layoffs and an overhaul to Block’s managerial strategies, including 80 manager layoffs and 193 demotions from manager to “individual contributor roles.” It also includes the immediate closure of some 748 open jobs that Block had been hiring for.
“thank you to all those leaving us,” the CEO concludes. “we will continue to honor [your work] by increasing our value to our customers, and therefore to all of our shareholders, including you.”
Though Dorsey cryptically insists that the layoffs are meant to flatten the “org so we can move faster and with less abstraction,” the moves come as Block’s ambitions dramatically shift from crypto makework to buy-now-pay-later schemes, a growing trend in the fintech sector. In that sense, the layoffs are probably a sign that the blockchain hype train — which Dorsey eagerly jumped aboard back in 2021 — was too good to be true.
In November of 2024, for example, Dorsey announced he was “winding down” Block’s crypto-arm, known TBD, which is now in a permanent state of “wound down,” according to its website. It was a telling moment, as Dorsey once hailed TBD as the frontier of decentralized digital currency, drawing investment cash from around the world.
Luckily for the remaining Block employees, predatory loans are Dorsey’s bread and butter. In 2023, a scathing report by Hindenburg Research claimed that Block had dramatically overhyped its user counts, facilitated fraud, and preyed on low-income users. Though Cash App marketing hailed the platform’s “instant deposit” feature as “magic,” the report claims it was really a form of predatory payday loan that fueled upwards of 31 percent of the app’s revenue.
“The ‘magic’ behind Block’s business has not been disruptive innovation,” the report reads, “but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.”
That in mind, maybe the best way to look at Block’s layoffs isn’t an end to the crypto boom, but a return to a time-tested fintech model.
The CEO should be set either way, as the report summarized at the time: “in the meantime, Dorsey and top executives already sold over $1 billion in equity near the top, ensuring they will be fine regardless of the outcome for everyone else.”
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