Financial technology company Block is set to reduce its workforce by 4,000 employees out of a total of over 10,000 in a strategic move to leverage artificial intelligence. Following this announcement by the CEO, the company’s shares surged by over 20% in premarket trading on Friday, February 27, as per The Associated Press.

“The core idea is straightforward. The evolution of intelligence tools has transformed the essence of building and operating a business,” stated CEO Jack Dorsey in a letter to Block’s shareholders, highlighting the company’s focus on utilizing AI across platforms like Square and Cash App.

Dorsey emphasized that a more streamlined team, equipped with advanced tools, can achieve higher productivity and quality. His remarks on the pivotal role of AI in this decision were also shared on social media platform X, formerly known as Twitter, a firm he helped establish.

In efforts to support affected employees, Dorsey outlined various assistance measures in a post on X. The specific details regarding the laid-off staff, within the San Francisco-based company operating in the U.S., Canada, select European regions, Australia, and Japan, remain undisclosed.

Analysts noted that the anticipated job cuts are anticipated to enhance Block’s profitability and operational efficiency, prompting increased investor interest. Block’s shares exhibited a 5% rise to $54.53 before its fourth-quarter earnings report, spiking to nearly $69 in after-hours trading.

The mobile payments service provider reported a 24% surge in gross profit for the fourth quarter compared to the previous year, reflecting positive financial performance amidst the restructuring. Commenting on the industry shift, Stephen Innes from SPI Asset Management highlighted the significant impact of intelligence tools on reshaping business operations and job structures.