Block, the payments company co-founded by Jack Dorsey, is planning to lay off up to 10% of its workforce in an effort to streamline operations and improve performance. Dorsey believes that the company's headcount has grown too quickly and is now outpacing its growth and profitability. This has led to operational inefficiencies and frustration among employees and customers. Block, which processed $46.22 billion worth of transactions in a year, aims to reduce duplication and redundancy through performance management and restructuring.
Dorsey has emphasized the importance of transparency throughout this process. He believes in providing information to employees and allowing them to make their own decisions. He plans to cap the number of employees at 12,000 until the business's growth surpasses the company's headcount. Dorsey intends to explain the reasoning behind these decisions, even if employees may not agree with them.
Block's third-quarter earnings report showed $5.62 billion in revenue and a 21% increase in profits. Despite the layoffs, the company remains financially strong. Dorsey expects the workforce to be smaller by the end of next year.
This restructuring plan is part of Block's efforts to address the challenges it has been facing, including undisciplined acquisitions, uncollectible consumer loans, and a lack of profitability. The company's share price has fallen about 85% from all-time highs, and investor trust has been eroded. The recent acquisition of Afterpay has not yielded the expected results, and other acquisitions, such as TIDAL, have been a drag on financial performance. Block has struggled to generate a profit, and its quarterly net losses have deepened. The company's foray into cryptocurrencies and allegations of fraud and little oversight from short seller Hindenburg Research have further added to the challenges.
Given these challenges and the ongoing restructuring efforts, it is advised to approach Block shares with caution and consider investing in safer, more profitable options.
BuzzFeed has sold Complex to Ntwrk for $108.6 million in an all-cash deal. The sale includes a 16% reduction in BuzzFeed's remaining workforce. The newly merged Ntwrk-Complex company will be led by Aaron Levant and will focus on creating a global content, commerce, and experiential platform. The sale of Complex is part of BuzzFeed's restructuring to optimize sustainable revenue streams. BuzzFeed will now focus on four brand pillars: BuzzFeed, First We Feast, HuffPost, and Tasty. The layoffs are expected to yield approximately $23 million in annualized compensation cost savings. BuzzFeed plans to use the cash proceeds from the sale to strengthen its balance sheet and improve liquidity. The company will release more details of its post-Complex restructuring on February 28.
Jack Dorsey, the co-founder and former CEO of Twitter, has stepped down from the board of Bluesky, an independent public benefit corporation that is developing an open and decentralized standard for social media. Dorsey's departure was confirmed in a tweet where he responded with a terse 'no' when asked if he was still on the Bluesky board. The exact timing of his departure is unclear, as Bluesky's corporate FAQ still listed him as a board member as of Sunday morning. Bluesky has thanked Dorsey for his help in funding and initiating the project and is now searching for a new board member who shares their commitment to building a social network that puts people in control of their experience. Dorsey first announced Bluesky in 2019 and the project has since become an independent public benefit corporation led by CEO Jay Graber. Despite deleting his Bluesky account last year, Dorsey remained the biggest name associated with the project. In addition to his involvement with Bluesky, Dorsey has been active on Twitter, dropping corporate news and weighing in on other topics.
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