Block Layoff 2026: What Employees Need to Do This Week

A layoff notice from Block starts several time-sensitive clocks that most employees don't know are running. Block announced its second round of job cuts in 2026 on November 5, this article covers every decision you need to make, in deadline order, so nothing slips through.

What happened

Block announced a second round of layoffs on November 5, 2026. The company didn't specify the number of employees affected or which departments are being cut. What's known is that this follows an earlier round of cuts earlier in the year. If you received a notice, the deadlines below apply to you now, regardless of when your official last day falls.

What should you do about unemployment insurance first?

Unemployment insurance is a weekly cash benefit paid by the state while you look for work. In California, the program is run by the Employment Development Department (EDD).

File the same day you receive your layoff notice. California doesn't pay benefits retroactively to your last day worked. Every day you wait is a day of potential benefits you can't get back. You file online at edd.ca.gov.

California's maximum weekly unemployment benefit is $450 as of 2026 (EDD). Your actual benefit depends on your earnings in a base period of roughly the past 18 months. You'll need to verify your identity, EDD uses ID.me for verification, so have your government-issued ID ready when you file.

There's a one-week unpaid waiting period before benefits start. That week counts, so filing immediately matters. You'll certify for benefits every two weeks after that. Keep records of your job search activity, California requires it.

If you worked in a different state before moving to California, you'll still file in California if that's where you were employed by Block. The state you worked in is the state that pays.

What should you do about health insurance?

COBRA is a federal program that lets you keep your current employer health coverage after you leave. The tradeoff is cost. Block was likely paying a large share of your monthly premium. Under COBRA, you pay the full amount plus a 2% administrative fee. The average COBRA premium for individual coverage in 2026 is $703 per month (KFF). Family coverage runs significantly higher.

You have 60 days from your qualifying event (the date you lose coverage) or the date Block sends your COBRA notice, whichever is later, to elect COBRA (DOL). The useful thing about COBRA is that it's retroactive. That means you can wait the full 60 days before deciding. If you stay healthy during that window, you can skip it. If you need care, you can elect it and coverage kicks in back to your loss date.

Your other option is the Marketplace. Losing employer coverage is a qualifying life event, which opens a 60-day Special Enrollment Period on healthcare.gov (HHS). Marketplace plans may cost less than COBRA, depending on your income. If your income drops significantly in the months after your layoff, you may qualify for subsidies that bring the premium down further.

Compare your COBRA premium notice against Marketplace quotes at healthcare.gov before the 60-day window closes. Don't let either clock expire without making a choice.

Should you sign your severance agreement right away?

No. A severance agreement is a legal contract, usually in exchange for waiving your right to sue. Take the time the law gives you.

If you're 40 or older, the Older Workers Benefit Protection Act (OWBPA) requires Block to give you at least 21 days to review an individual agreement (EEOC). If this layoff is part of a group termination (two or more employees let go together), that review window extends to 45 days. After you sign, you have 7 more days to revoke your signature. The agreement can't become effective until that 7-day window passes (EEOC).

Use those days. Here's what to look for: What does it pay? Is severance based on years of service? Does it include a release of all claims, or specific ones? What happens to your equity? Does it extend your benefits? Are there non-disparagement or non-compete clauses that could affect your job search?

If you're under 40, OWBPA doesn't apply, but you still don't have to sign immediately. Read the full agreement before you do anything. Consider having an employment attorney review it, especially if you have a substantial equity position or if you believe the layoff may have been discriminatory.

One more thing: HR may tell you the offer expires if you don't sign quickly. Under OWBPA for employees 40+, that pressure doesn't override your legal right to the full review window.

What about your Block equity and options?

Block is a public company (NYSE: SQ), so equity is likely part of your compensation. The rules differ depending on what type of equity you hold.

If you hold Incentive Stock Options (ISOs), you have 90 days from your termination date to exercise them and keep their ISO tax treatment under IRC Section 422 (IRS). After 90 days, any unexercised ISOs convert to Non-Qualified Stock Options (NQSOs), which are taxed less favorably. Mark your calendar the day your termination is official.

ISOs come with AMT risk. If you exercise a large number of ISOs in a single tax year, the spread between your exercise price and the fair market value may trigger the Alternative Minimum Tax. If your ISO position is substantial, talk to a CPA before you exercise.

If you hold NQSOs, the tax treatment is simpler but still time-sensitive. The spread at exercise is ordinary income, withheld at the federal supplemental rate. Check your grant agreement for the post-termination exercise window, which may be shorter than ISOs.

If you hold RSUs (Restricted Stock Units), the standard rule is that unvested RSUs forfeit on termination. Vested RSUs that haven't settled yet may have specific terms. Review your grant agreements now. Don't assume anything forfeits until you've read the actual documents.

Download all your equity documents from Block's equity platform before your systems access is cut off.

What about taxes on your severance?

Severance is taxable income. The IRS treats it as supplemental wages, which means Block will withhold federal income tax at a flat 22% supplemental withholding rate on the first $1 million paid (IRS Publication 15). If your marginal tax rate is higher than 22%, you'll owe the difference when you file your return.

The withholding situation creates a timing problem. If your severance is paid in a lump sum late in the year, and 22% withholding isn't enough to cover your actual tax liability, you may owe a penalty for underpayment of estimated taxes.

The IRS quarterly estimated tax deadlines for 2026 are June 15 for Q2 and September 15 for Q3 (IRS). If your severance arrives before those dates and your withholding is running short, making an estimated payment can prevent a penalty at filing. Use IRS Form 1040-ES to calculate and submit.

Your state income tax situation depends on California's rules for the tax year the severance is paid. California taxes severance as ordinary income. The same underpayment risk applies at the state level.

What should you do with your Block 401(k)?

Your 401(k) balance doesn't disappear when you're laid off. You have options, and none of them require you to decide immediately, but you do need to understand the rules.

Your choices are: leave the money in Block's plan (if the plan allows it and your balance is above the minimum threshold), roll it to an IRA you control, or roll it to a future employer's plan when you start your next job.

If you do a direct rollover, Block transfers the funds straight to your new IRA or plan. No taxes, no penalties, no deadline pressure beyond getting the paperwork done.

If Block sends you a check instead (an indirect rollover), two things happen immediately. Block withholds 20% for taxes. You then have 60 days to deposit the full original amount (including the withheld 20%, which you have to cover out of pocket) into a qualifying retirement account to avoid the IRS treating the distribution as taxable income (IRS). Missing the 60-day window means the entire amount is taxable in the year you received it, plus a potential 10% early withdrawal penalty if you're under 59.5.

The direct rollover is almost always the better option. Avoid the check if you can.

Use the post-layoff checklist to track each of these decisions with specific dates filled in for your situation.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Layoff Guide

The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.

Get the Layoff Guide or build your free Decision Calendar.

Written by the Layoff HQ research team. Sources verified against DOL, EEOC, IRS, and state workforce agency primary documentation.

1. Block second round of layoffs, 2026: Business Insider
2. COBRA election window (60 days): DOL
3. Average COBRA individual premium ($703/month, 2026): KFF
4. Marketplace Special Enrollment Period (60 days): HHS/healthcare.gov
5. OWBPA 21-day and 45-day review windows, 7-day revocation: EEOC
6. ISO 90-day post-termination window (IRC Section 422): IRS Publication 525
7. Federal supplemental withholding rate (22%): IRS Publication 15
8. Q2 estimated tax due June 15, 2026; Q3 due September 15, 2026: IRS
9. California maximum weekly UI benefit ($450): EDD
10. 60-day indirect rollover rule: IRS