David Brooks
The Crypto Bet That Destroyed Block
Jack Dorsey bet the house on Bitcoin. The house lost $2.4 billion.
Block's February 7 announcement frames the third layoff round in three years as an "efficiency push." The company's 10-K filing with the SEC from three weeks prior tells the real story: $2.4 billion in losses for 2025, with $1.7B from "impairment of digital assets" (Bitcoin write-downs) and $700M in operating losses from Spiral, the crypto division that was supposed to save the world.
Here's my take: when you fire 1,100 people after already cutting 30% of your workforce over three years, you're not optimizing for efficiency. You're covering losses from bets that didn't pan out. The numbers speak for themselves: Block's stock trades at $147 as of February 10, 2026 — down 49% from its July 2021 peak of $289. Three rounds of layoffs, three years of decline.
Meanwhile, Stripe — which placed zero bets on crypto — grew revenue 35% in 2025 without firing anyone. The contrast isn't subtle.
Small Businesses Pay for Bitcoin Losses
The elephant in the room is the 4 million small businesses across the U.S. that depend on Square for payment processing. Coffee shops, barbershops, food trucks, boutiques. They don't have the volume for Stripe's enterprise pricing or the patience for PayPal's clunky interface. Square was their lifeline.
But since the 2024 layoffs, support wait times ballooned from 24 hours to 3-5 days. Bugs go unresolved for months. Forced terminal migrations come with zero training. Square POS's rating on Trustpilot and G2 dropped from 4.2/5 stars in January 2024 to 3.1/5 in February 2026.
Meet Sarah (name changed), owner of a taqueria in Oakland. She'd used Square since 2018. In November 2025, her terminal stopped syncing inventory with the app. It took 11 days to get a support response. The solution: "restart the device" (she'd already done it six times). She migrated to Toast in January 2026.
Toast reported gaining 12,000 Square locations in 2025. Support issues were the #1 reason cited.
When you cut 30% of your workforce over three years, service degrades. When service degrades, customers leave. When customers leave, you need more layoffs. Block is stuck in a death spiral, and Dorsey calls it "efficiency."
How Stripe Won Without Firing Anyone
Let's be real: if layoffs were the answer, your competitors would be doing the same thing. They're not.
| Metric | Block (Square/Cash App) | Stripe |
|---|---|---|
| Layoffs 2023-2026 | 3 rounds (~30% staff cut) | 0 layoffs |
| Revenue growth 2025 | -3% YoY | +35% YoY |
| Market share 2025 | 31% (vs 38% in 2023) | 28% (vs 22% in 2023) |
| Active users/clients | Cash App: -8% MAU in Q4 | +42% new merchants in 2025 |
| Stock performance (3yr) | -49% from 2021 peak | Private (last valuation $70B, up) |
| Crypto exposure | Spiral division: -$700M loss 2025 | Zero crypto exposure |
Stripe focused on B2B payment infrastructure for mid-to-large enterprises. Built stable tools, transparent pricing, impeccable technical documentation. Didn't bet on ideologies.
Block bet on Bitcoin because Dorsey is a crypto maximalist. Bought Afterpay for $29 billion in 2021 (now worth less than half according to Morgan Stanley). Neglected Square — the core product — while chasing decentralization fantasies. Spiral, the division meant to "save money," burned $700M in 2025 with no path to profitability.
The contrast is brutal: Stripe is the most reliable processor on the market. Block fires people every 12 months and blames "efficiency" for problems it created.
Three Layoff Rounds, Same Excuse
Dorsey's track record speaks volumes:
- 2023: Cuts 11% of staff (1,700 employees). Promises "focus on profitability." Stock falls 18% that year.
- 2024: Returns as CEO in May after Alyssa Henry's departure. Cuts 8% in October (950 employees). Stock drops 23% since his return.
- 2026: Cuts 10% (1,100 employees) on February 7. Stock down 2.1% post-announcement but down 49% cumulative since 2021.
Block eliminated roughly 30% of its workforce since 2022 (from 15,700 employees to 11,000 currently). The result? Cash App lost 4.5 million monthly active users in Q4 2025 — its first-ever decline. Square fell from 38% payment processing market share for small businesses (2023) to 31% (2025), per the Nilson Report.
Stripe — which fired nobody during this period — grew revenue 35% and increased market share from 22% to 28%. PayPal completed a 2024 reorganization without mass layoffs, and Venmo (its Cash App competitor) gained 2.1 million users in the same Q4 where Cash App lost them.
I've seen this movie before. After years covering the enterprise sector, the pattern is unmistakable: Block's problem isn't headcount. It's strategy. Dorsey prioritized crypto ideology over the payment processing business that made Square indispensable to millions of merchants. The board — packed with Bitcoin-aligned insiders — lets him stay despite three years of layoffs, $2.4B in losses, falling market share, and a Glassdoor CEO approval rating that plummeted from 72% when he returned in May 2024 to 38% in January 2026.
Here's the kicker: Block has 47 open positions for "senior engineering" and "product manager" roles on LinkedIn right now (February 2026) while cutting 1,100 people. They're not optimizing for efficiency — they're restructuring headcount, firing juniors and support staff while hiring higher-paid seniors.
This isn't a turnaround. It's a CEO refusing to admit his crypto bet sank the company. Twitter/X collapsed under the same Dorsey playbook: mass layoffs sold as "efficiency" while the product crumbled.
The bottom line is this: 4 million small businesses deserve better. They deserve a CEO who prioritizes stability over ideology. The board should act — not for shareholders, but for the merchants who built Square and now suffer the consequences of Dorsey's Bitcoin fantasies.
