The brokerage, which rates the stock "Outperform" with an $85 price target, said the scale of the reduction is rare for a major company and comes despite what it called a “beat and raise” quarter, helped in part by strength in Cash App Borrow.
Bernstein noted that while Block’s workforce was already down roughly 21% since 2023, it had expanded more than 150% compared with 2019, even as gross profit rose over 400% in the same period. The firm said the latest cuts cannot be explained solely by excess staffing, pointing to improving efficiency metrics.
Exiting 2025, Block generated about $800,000 in gross profit per employee, above several peers in payments, and guidance for 2026 implies gross profit per headcount of roughly $1.5 million, a level that would exceed many large technology firms.
Bernstein estimates the headcount move could yield around $750 million in personnel savings in 2026, or about $1 billion on an annualized basis, though management appears to be embedding only part of that benefit into updated adjusted operating income guidance, with some reinvestment planned.
The firm raised its 2026 and 2027 adjusted operating income forecasts but kept its price target unchanged, citing limited visibility into the broader consumer impact of AI disruption.
source https://www.investing.com/news/analyst-ratings/blocks-40-headcount-cut-seen-as-aidriven-reset-says-bernstein-4533426
