SAN FRANCISCO - Block, the financial services tech company led by Twitter founder Jack Dorsey, has announced plans to reduce its workforce by approximately 1,000 employees, as the wave of layoffs continues to impact the Bay Area tech industry. The decision comes as the company aims to cap its employee headcount at 12,000, according to a shareholder letter released last Thursday.

Currently employing over 13,000 individuals, Block's proposed job cuts would affect around 1,000 workers. The company expects to implement the workforce reductions gradually over the course of several months, with a target completion date set for the end of 2024, as revealed in the company's recent earnings call transcript.

In his shareholder letter, Dorsey highlighted the importance of strategically managing the company's growth. He stated, "As we continue to view the business through the lens of our investment framework, we continue to find opportunities for constraints we believe will lead to greater growth." Dorsey referred to a previous effective measure implemented before Block's IPO, which involved imposing an absolute cap on the number of employees. This initiative aimed to improve performance, streamline work prioritization, and evaluate the alignment of products with company strategy. Dorsey announced a similar approach this time, intending to hold firm at 12,000 employees until the business's growth significantly outpaces the company's expansion.

Block, previously known as Square Inc., shifted its headquarters from San Francisco's Mid-Market neighborhood to Oakland's Uptown Station last year. The company comprises various tech brands, including popular payment platforms Square and Cash App, Tidal music streaming service, and crypto platform Spiral.

These job cuts at Block are the latest in a series of layoffs occurring within the Bay Area tech sector. Nextdoor, a neighborhood-focused social networking company, announced earlier this week that it would be downsizing its workforce by 25%, adding to the growing trend of cutbacks in the region.

The news of Block's 1,000 job cuts adds to the uncertainty surrounding the Bay Area tech industry, as companies reevaluate their staffing needs in response to evolving market conditions. With the reduction planned over the next few years, it remains to be seen how Block will adapt to the changing landscape and continue its growth trajectory while maintaining a leaner workforce.