We'll see how much the AI aspect is true by whether they're thinning out teams equally, or just axing whole initiatives. My impression of Block was that it was mostly a one-trick pony (okay, two if you include CashApp) with a bunch of side initiatives that never seemed to pan out, so I'm expecting it to be more of the latter, with this being more of an admission that they're now in "maintenance mode".
Either way, I think this is how it's gonna be. Regardless of whether AI significantly increases productivity (40%? come on), layoffs will be preemptory. Executives will see the lack of productivity boost as being due to lack of pressure, and imagine engineers are just using the AI to make their own lives easier rather than to work more efficiently. You can't really double output velocity because your users will see it as too much churn, so the only choice is to lay off half the workforce and double the workload for those who stay. "Necessity is the mother of invention." They'll overlook the fact that the work AI tools provide only encompasses 10% of your job even if they're 100% efficient.
> layoffs will be preemptory. Executives will see the lack of productivity boost as being due to lack of pressure,
Look I don’t like layoffs and I don’t want to come off as an apologist. I’ve been laid off from a wildly profitable company and I get that pain.
But I think at some point we do need to be honest that businesses want to give up on failed projects, and the lazy ones will do that through layoffs because tech has so much churn anyways. It’s in vogue to blame AI for these things. I doubt most of these CxOs think actually that AI will transform their business in the next few years, and I question how many even care about applying pressure to employees.
I don’t want to come off as an apologist for bad corporate behavior, because I think it’s bad, but sometimes I think they’re just taking the easy way out on corporate messaging for a not-crazy decision (of ending failed or bloated projects). As you alluded to, “maintenance mode” for a business just doesn’t need as many employees. 40% at once seems high, I’ll concede though.
40% actually seems reasonable for a flip into maintenance mode. That’s what PE firms do when then buy cash cow businesses. Dramatically cut engineering on new functionality, cut back on sales and marketing, remove all redundancy in operations.
Anyone who has counted on a vendor that went private or was bought by a rollup firm has felt this pain.
Better to do it all at once than repeated declines.
Updated to two tricks. And you could argue three if you call banking its own trick. Afterpay was an acquisition (and much smaller) so IDK if that counts.
Still, all the bitcoin stuff, music, other side ventures, most of the international expansion, attempts to appeal to bigger businesses, the recent "focus local" vision, all hardly made a dent in the respective markets and I wouldn't be surprised if they lost money or are still losing money on most of those things.
CashApp was launched in 2013, long before Zelle and other instant payment rails arrived, which closed wallet providers solved for (Venmo too, owned by...Paypal). There is little growth to be had when these customers can get free deposit accounts with access to Zelle or FedNow to move value for free instantly. It's success to be sure to accumulate the cashflow from the customer base built, but it isn't lasting.
Absolutely, most of this is private corporate duct tape over a lack of Pix (Brazil), UPI (India), Instant SEPA (Europe), etc [1]. “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” [2] In a US financial services market, Venmo and CashApp are unnecessary assuming you procure a deposit account from a bank or credit union with instant payment rails access [3] [4]. Even Schwab has access to Zelle, for example. You need not extend credit and have credit risk exposure for paper checks anymore as well.
Nice severance; but in this job market, holy shit.
Yeah, you get 5 months of severance and a bunch of devices and such; but, does this CEO really think these employees will find new work in that time? In this job market?
If the profits are still up and growing, why on earth would you evict 40% of the company, to send them into this job market? Why not … try new industries, play around, try to become the next Mitsubishi or Samsung or General Electric. If you’ve got the manpower and talent, why not play with it and see if anything makes money. In-house startups with stable capital, all that.
> Nice severance; but in this job market, holy shit.
I just talked to a bunch of recruiters (we're hiring) and their main piece of advice was: The market is crazy. Move fast. We're seeing people getting jobs within days of starting to look, bailing on offers after signing because they got a better offer somewhere else, etc. 24 hours is the longest you can leave a candidate waiting. You have been warned
edit: I am in SFBA. Your reality may be different. People have spilled some 2 trillion dollars onto the area in the past 2 years. A lot of that is going to software engineers as everyone tries to shove AI down consumers' throats. Rents are up 60% in 12 months, which is not the sign of a cold employment market :)
You're hiring, so of course that's the message you're getting from recruiters. "Market is hot", so take their candidates quick before someone else snaps them up. Don't believe this line without confirmation.
No, that's just the reality of the market right now. Software engineers are an extremely hot field, likely because everybody is trying to add AI to their products.
I'm being very picky with what I look at, which doesn't help, but yeah, it doesn't seem great. Maybe they're all in person gigs? Or is there some ageism? (There has always been some ageism in software)
Easier to hire consultants to add AI to do your software engineering for you than temporarily hire humans with needs and benefit costs to add AI to do your software engineering for you.
Just the current reality in SFBA. People have spilled some 2 trillion dollars onto the area in the past 2 years. A lot of that is going to software engineers as everyone tries to shove AI down consumers' throats.
Not being obtuse, I even googled it, but I have no idea what SFBA is in this context. I'm assuming it's not to do with windsurfing in the San Francisco Bay Area or some kind of insulation. Could you elaborate?
Pre-covid, and during the early covid hiring spree, I used to get messages from eager recruiters every week, I get maybe one a month these days, and they are much more tepid.
You are trying to see employees as more than just statistics which is not what CEOs are doing. They are not empathising with 4k employees because they are not seeing 4k human beings through multiple layers of abstraction. To survive at their job they have to choose abstraction. The human brain doesn't have the capacity to simultaneously comprehend the complex needs and emotions of 4000 other human beings without burning out.
Yes this sucks, but this mode of operation for our society was repeatedly chosen through centuries of experimentation. We all asked for this, literally.
obviously he's going to posture his company as growing and doing well, but clearly not enough for the board and shareholders given their headcount growth from zirp
some companies are in the position to go for moonshots and block hasn't panned out
Maybe I'm a big capitalist, but 5 months of severance seems very generous; a job hasn't been a commitment that the company will take care of you forever in several generations. Covering you until the middle of this year should go a long way, and yeah the job market is messed up, but at least it's not mid-November where holidays mean hiring falls off the rails.
Not really, no. I was underemployed for 6+ months at the start of my career, but it's easier to take whatever is available at that point. I did some data entry and then first tier ops desk restart the server when the light turns red stuff, before I got a "real job". Doing that mid career and keeping a good attitude would be difficult.
But I would think 5 months paid time before you have to go on state unemployment is significantly better than the WARN act minimum of 60 days of notice or pay or the alternative of a campaign to raise attrition. Looks like recent google/meta layoffs are 4 months, so it's 25% better than that. I always thought I wanted to get a package, but I recognize that I would probably not have been happy if it happened.
So does being dumped from a relationship. You might not be able to find another relationship in 6+ months. But I don't think people would seriously propose that people should therefore not be able to leave a relationship.
I feel like the idea that X doesn't owe you Y is fundamentally at odds with the fact that humans are a cooperative species and survive the best when they are cooperating. A choir can hold a note together because individuals can stop singing to breathe, safely covered by peers who will take their turn to breathe later. What is the point of organizing socially if not for the benefit of all society members?
I know we have to balance inefficiency and optimal allocation of resources... but I agree it doesn't seem optimal for social wellbeing to remove people from their access to health and risking their ability to house and feed themselves without a financial need to do so (like Block going bankrupt).
I think we Humans can be both cooperative species and violent,self-centered tribalists species and definitely all the grey area between the two at the same time as well.
> with the fact that humans are a cooperative species and survive the best when they are cooperating.
I dispute that this is a fact. Maybe within a small group, but startups shouldn't be possible if masses of more cooperating people led to better outcomes. A large company should always win there and that does not happen.
> What is the point of organizing socially if not for the benefit of all society members?
We don't come anywhere close to this on a global scale. Most countries aren't this way on a national scale.
Startups generally _don't_ end up with better outcomes. Large companies stay stable, startups are volatile and often end in failure.
Stability means removal of volatility, which means to stay stable they end up becoming more generalised, rather than the laser focus a small team like a startup can have. That laser focus can work out when applied to the right problem at the right time, but is very much not a guarantee.
More profits, line mustn't just go up, line must go higher. Giving away the devices is like saying "we're replacing both you and your device with AI and it's not like that device will help you get another job in this market anyway, good luck lol."
>we're not making this decision because we're in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. we're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly.
This is one way of making an all-in bet on AI.
>we're not going to just disappear people from slack and email and pretend they were never here. communication channels will stay open through thursday evening (pacific) so everyone can say goodbye properly, and share whatever you wish. i'll also be hosting a live video session to thank everyone at 3:35pm pacific. i know doing it this way might feel awkward. i'd rather it feel awkward and human than efficient and cold.
Well that's interesting, wonder if we'll actually get a proper accounting of which departments take which cuts.
Even if the AI piece isn't really true - smaller flatter teams will move faster anyway. I always wonder having worked in a lot of startups with 10-50ppl, what on earth a business does with 10000.
> I always wonder having worked in a lot of startups with 10-50ppl, what on earth a business does with 10000.
If a small business needs to send a replacement widget to a customer in a foreign country, they label it "$0 value" (as it's a free replacement part) and mail it with a swipe of a corporate credit card.
If a large business needs to do the same thing, the sender asks the mail room, giving them a budget code and delivery address; the mail room contacts the widget designer for a HTS code, size and weight; then contacts their shipping broker for a quote; then contacts the finance department to raise a purchase order; the finance department contacts the budget code owner for spend approval; then raises a purchase order; then forwards it to the sender who forwards it to the post room who forwards it to the shipping broker who arrange a collection. Later the shipping broker will send the post room an invoice against the purchase order, which they'll send on to finance, who'll query the sender who'll approve paying the invoice.
> Even if the AI piece isn't really true - smaller flatter teams will move faster anyway.
Quite possibly - but you have to remember to remove the bureaucracy, not just remove the people who operate the bureaucracy. If you try to do the large business process with the small business team, it'll be even slower.
Seconded. My experience has been that -- even while still complying with lots of overhead (e.g. government regulations and compliance) -- smaller teams of 1-3 devs move waaaaay faster than teams of 4-10. Could definitely speak to the overall codebase quality or some other factor, but yeah.
They're still a megacorp, roughly, with like 6k people remaining. That's a huge company. Huge companies need hierarchy to function, the "flat" thing is a really dumb idea. There's no way to make it analogous to that <50ppl team that executes well and moves fast. To do that you actually need to have a small company.
I question how much of this is really AI vs them just regrouping around their core products and shutting down a lot of ventures or tertiary projects. Either way, the messaging we're seeing is a real shift from the ZIRP ear. Tech companies used to use headcount as a metric of growth. They'd be hiring just to say they're hiring because it looks like growth. Now it's in vogue to boast about your AI adoption and how many fewer heads you need to operate. I think both are lot of blowing smoke, but now it's going to hurt a lot of people.
Square/Block stock peaked at $273 in Feb 2021 and is currently at $54.43. So I'm not buying the whole "the company is doing great! The layoff is just because of AI."
Anyone who has worked in the big tech industry knows that probably more than half of the workforce performs tasks that, in essence, are superfluous.
But these things happened: 1) Musk has shown that Twitter can operate with 5% (approximately?) of the workforce he inherited; 2) laying off a lot of people was seen as a sign that the company was in trouble, but not now because; 3) artificial intelligence makes point 2) not a semi-desperate move, but a forward-thinking adjustment to current and future technology development.
I've been out of work for almost a year now, after being laid off, and I think it's very unlikely that I'll ever return (not because of my choice but their choice) to work in the tech industry as a W2 employee. Oh well.
This makes it make way more sense. That is a huge amount of growth really fast. I've worked in those companies, it's really hard on the work culture and organization when things grow that quickly.
I think the potential for productivity is there with AI, but this size of a cut based on speculation made no sense. This is actually reasonable in this light and is probably for the best. I'll be curious to see if any employees, former or otherwise talk about it
high impact executives like myself are too busy to use up our precious time with minutia like capitalization. every second counts when youre a high impact ceo and thats just one reason why our compensation is 1000X your own.
Yeah I was thinking the same. Pretty generous severance but I'd be pissed if I was fired by someone who can't even be bothered to press shift. Probably thinks it makes him cool and edgy.
>we're not making this decision because we're in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving.
In my country, this action would be literally illegal.
Even in countries where it isn’t, it feels highly immoral. “I’m not in any kind of pressure to do this but I’m choosing to shed the people who created my wealth for greater personal gain”.
i'm gonna write this terrible news in all lowercase cause it's super aesthetic. maintain a bit of professionalism for the 4,000 people whose lives i'm throwing into turmoil? i don't think so, i have my shift key taped over so i don't accidentally show respect to anybody
Sucks for the people to lose their jobs, but probably the most honest message you’ll ever see.
What I don’t understand is why. There’s a natural churn at each company. Of course it’s not 40%, but probably 4-5% per year, but I doubt the company freezes hiring and they are not pressured to do this.
> probably the most honest message you’ll ever see
Interesting that this is your takeaway; it seems that this is effectively an investor-friendly way to admit that Block hired too many people over the course of the pandemic and doesn't necessarily have obvious expansion/growth (that would require people to write more software) on the roadmap.
"Oh the business isn't going too well so we need to lay people off" - said no CEO ever, but "AI go brrrr" makes investors happy!
I think the AI angle is a fig leaf for perpetual mismanagement. Managers at Block privately complained there were a lot of people doing almost no work. Recently, teams have lost people one at a time, sometimes laid off the day after each other.
If they can organize employees to make more money, they will. But they can't and admitted it.
> i'd rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome.
I hope this gets drilled into the heads of everyone who sells their labor. The company is profitable, and Jack could have kept 4000 people employed with no difference in outcome, instead, he chose this.
Block isn't a jobs program, and employees cost money. Layoffs suck (I got laid off last year) but the reality is that it's a business and regardless of profitability, if you're not worth more than your salary you're a liability. The severance given is quite generous and fair. My biggest issue is that Block should never have grown so big in the first place.
Backers probably told him to. I can't open LinkedIn any day without trending posts that engineers can hands off to LLMs. That must tilt some ideas to investors who see winners as ways to balance their losses.
Why make others misfortune a platform for ego expression? Why not doing things elegant, quiet, keep it in-house? Because misery of others drives stock prices up! It's a sacrifice he's willing to make.
>Block said Thursday it’s laying off more than 4,000 employees, or about half of its headcount. The stock skyrocketed more than 24% in extended trading.
Society provides support to this kind of decision, it's obvious why it happens.
And nobody really believes this whole "we got too efficient" so now we don't need 40% of our company anymore.
If AI really improves efficiency and allows the company's employees to produce more, better products faster and thus increase the competitiveness of a company... then why does said company fire (half of!) its staff instead of, well, producing more, better products faster, thus increasing its competitiveness?
Am I naive or is AI a lie when marked as a cause?
Why is it that us employees are gaslighted with the FOMO of "if you don't adopt AI to produce more, then you'll be replaced by employees who do", and why do these executives don't feel "if you fire half of your employees for whatever reason, you'll be outcompeted by companies who... simply didn't?"
The year is 2030, tech companies provide the exact same value proposition to the consumer that they did in 2024, except it is buggier, full of sparkle buttons you can’t get rid of, and isn’t a source of high-paying employment. The front page of HN still has 5 posts from Blog Guys titled “Programming is Fun Again”.
I don't understand anyone who says layoffs are due to improvements in AI tooling.
"Thanks to LLMs, each worker can do twice the work they could before. Naturally we are firing half the company because ... business is good and ... too much productivity is bad?"
> Thanks to LLMs, each worker can do twice the work they could before. Naturally we are firing half the company because ... business is good and ... too much productivity is bad
this is an incorrect take. The company needs a certain amount of productivity at each point.
If not, how would you explain that they had only 10,000 employees and not 20,000? They could still remain profitable.
LLM's increased productivity and each person could do approximately 20% more work so it follows that they need fewer people. If not, they should have had 12,000 to begin with.
Imagine you run a mowing service with 4 employees. Suddenly 2 more people volunteer to mow yard for your company for free!
Is your reaction to fire two of the paid employees and keep mowing the same number of yards (with reduced payroll costs), or to expand the business to mow more yards?
Which of those responses feels more in line with a "strong and growing" business that is "continuing to support more customers" and has "improving profitability"?
What are the odds this is actually due to overhiring during the pandemic? From what I know, that was the principle reason for the Amazon layoffs. Would love to be corrected if I'm misremembering.
People keep saying it’s pandemic over hiring, but it should be called ZIRP hiring. With the cost of money almost 4x what it used to be, companies have to deliver now, not just coast on promises of growth and success that may never materialize. Have to sing for that supper.
I reckon this move is related to bitcoin doing poorly. A LOT of their revenue is bitcoin related and I reckon they realized they're going to have an absolute stinker of a Q1 '26 result...
>repeated rounds of cuts are destructive to morale, to focus, and to the trust [...] i'd rather take a hard, clear action now [...] than manage a slow reduction of people toward the same outcome
I think this is pretty agreeable, spanning layoffs into a monthly/quarterly "Hunger Games" is very damaging to employee morale.
Imagine receiving this message and the author couldn't even be bothered to capitalise letters properly. How insulting. It's like being fired by a five year old child.
If AI makes Block devs 10x more productive, with 0.5x workforce, that should still be like a 5x increase in productive output right? Can't wait to usher in an age of abundance post AGI as the price of goods and services continue to drop.
Or how about your revenue lines are in retail and peer-to-peer finances, primarily for small-to-medium sized businesses and low-to-mid income individuals, primarily in the US market, all of which are struggling from tariffs and economic slowdown in their brackets.
It is hard to tell what this company does, but it seems to be involved in bitcoin. Coincidentally we have had a huge drop in bitcoin in the last months.
They own Square, Cash App, Afterpay and Jay Z's music streaming service Tidal. They make a decent amount of money from people buying and selling Bitcoin on Cash App but most of their revenue is not related to Bitcoin.
I'm still not sure I quite agree with this AI replacement premise.
Assuming the premise of profitability and a sound business
then this sounds like a failure of product if anything. It just doesn't follow for me that when you see more productive teams the immediate answer is that you need less people. Especially for silicon valley types this seems antithetical to scaling.
Thinking of it in two ways
- Yes you could (in theory but I still argue not 100%) cut workforce and have a smaller # of people do the work that everyone else was doing
Or
- You could keep your people, who are ostensibly more productive with AI, and get even more work done
Their headcount was around 10,000. Before AI, do you think each additional employee after 10,000th would increase the profit?
- if yes, then why didn't they hire more employees?
- if no, then isn't it obvious that they don't need more than 6,000 employees who are approximately 20% more productive? if the 6,001th employee can add profit then surely 10,001th could've also added right?
Dorsey is in AI psychosis. He required every employee to send him an email weekly which then he had summarized by AI because of course he aint reading it himself.
Even in "AI psychosis" I don't see how firing people is a logical response to advances in AI.
If AI tools really are a significant multiplier to productivity, companies should be hiring more people to take advantage of that multiplier.
If you suddenly have the ability to get more output per dollar spent, a healthy business should respond by spending more dollars, not spending less to keep output the same.
because demand is weak and the product markets are saturated. there are dimishing returns to increasing investment. so these companies switch to managing their earnings ratio. if you cant grow revenue, then cut costs.
i feel similarly. suppose ai makes people more productive:
1. companies that are not doing well (slow growth, losing to competition etc) or are in a monopoly and are under pressure to save in the short term are going to use the added productivity to reduce their opex
2. companies that are doing well (growth, in competitive markets) will get even more work done and can't hire enough people
my hunch is block is not doing as well as they seem to be
Square point of sale payment processing for businesses, Afterpay BNPL, and then the consumer side CashApp business. And Tidal Music streaming for some reason.
Right now is exactly the time when we need to pause issuing new or transferring existing H1B/L1/other work visas for least a year until we know full impact of AI on economy and employment.
My guess: they keep you around on contract for 1-6 months because laying you off immediately would be very disruptive.
One company I worked for did this. It felt weird to everyone. But they did give a slightly better severance to those that stuck out their contracts so it worked out slightly better for them.
i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter. repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead.
> we're not making this decision because we're in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. we're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly.
Once again, this is "AGI" in it's most direct and absolute version with zero fluff.
I unfortunately predicted more layoffs will occur back in 2025 [0] and I see only but acceleration on this.
>> * this is "AGI" in it's most direct and absolute version with zero fluff*
> Given it’s an ambiguous term, sure. But I don’t think a better collaborative AI is what anyone imagined when we said AGI years ago.
He scare-quoted AGI. I think what he means is we won't experience AGI as some kind of utopia of abundance (which is how it is hyped to us), we will experience as massive and brutal layoffs.
Actual AGI will be worse. If Block had that, Dorsey wouldn't be laying off 40%, he'd probably lay off 80% or more.
They're cutting 40% (edit: the post actually says "nearly half") of the workforce (4k out of 10k). That's huge.
The severance is 20 weeks of pay + 1 week per year of tenure, stock vesting through May, 6 months of healthcare, their corporate devices, and $5k cash.
That significantly more generous than the 12-16 week severance packages being doled out by big tech during the great layoffs of 2022-2023 if I remember correctly.
In 2023 Google gave 16 weeks plus 2 for every year of tenure, so not significantly less (and more if your tenure was >5 years), plus google also vested stock for entirety of the 16+ weeks.
Honestly the whole Silicon Valley shtick is becoming old. The fake positivity, the quirky writing style, the "I think the most important quality is sticktuitiveness" linkedin-esque bullshit. Not to mention the cargo-cult that is so obvious in every GPT-wrapper startup.
This was mostly born out of counter signalling the businesses that valued serious people over competent people in the 20th century.
But, like with all things, the pendulum has swung too far in the opposite direction. I believe the next wave of tech countersignalling will be people who actually do take themselves seriously, maybe even dress in suits, etc..
I noticed that as well and it oddly made me sit for a minute to think about it. I ended up deciding that it landed a bit more 'real' and unfiltered. Could be interpreted many ways. Nobody knows the actual why but (possibly) Jack.
Either way, I think this is how it's gonna be. Regardless of whether AI significantly increases productivity (40%? come on), layoffs will be preemptory. Executives will see the lack of productivity boost as being due to lack of pressure, and imagine engineers are just using the AI to make their own lives easier rather than to work more efficiently. You can't really double output velocity because your users will see it as too much churn, so the only choice is to lay off half the workforce and double the workload for those who stay. "Necessity is the mother of invention." They'll overlook the fact that the work AI tools provide only encompasses 10% of your job even if they're 100% efficient.
Look I don’t like layoffs and I don’t want to come off as an apologist. I’ve been laid off from a wildly profitable company and I get that pain.
But I think at some point we do need to be honest that businesses want to give up on failed projects, and the lazy ones will do that through layoffs because tech has so much churn anyways. It’s in vogue to blame AI for these things. I doubt most of these CxOs think actually that AI will transform their business in the next few years, and I question how many even care about applying pressure to employees.
I don’t want to come off as an apologist for bad corporate behavior, because I think it’s bad, but sometimes I think they’re just taking the easy way out on corporate messaging for a not-crazy decision (of ending failed or bloated projects). As you alluded to, “maintenance mode” for a business just doesn’t need as many employees. 40% at once seems high, I’ll concede though.
Anyone who has counted on a vendor that went private or was bought by a rollup firm has felt this pain.
Better to do it all at once than repeated declines.
Still, all the bitcoin stuff, music, other side ventures, most of the international expansion, attempts to appeal to bigger businesses, the recent "focus local" vision, all hardly made a dent in the respective markets and I wouldn't be surprised if they lost money or are still losing money on most of those things.
[1] https://en.wikipedia.org/wiki/Instant_payment
[2] (widely attributed to Winston Churchill)
[3] https://enroll.zellepay.com/
[4] https://www.frbservices.org/financial-services/fednow/organi...
I can make a lot of revenue selling $100 bills for $10. I'm not sure it'd "pan out".
Yeah, you get 5 months of severance and a bunch of devices and such; but, does this CEO really think these employees will find new work in that time? In this job market?
If the profits are still up and growing, why on earth would you evict 40% of the company, to send them into this job market? Why not … try new industries, play around, try to become the next Mitsubishi or Samsung or General Electric. If you’ve got the manpower and talent, why not play with it and see if anything makes money. In-house startups with stable capital, all that.
This seems … wrong.
I just talked to a bunch of recruiters (we're hiring) and their main piece of advice was: The market is crazy. Move fast. We're seeing people getting jobs within days of starting to look, bailing on offers after signing because they got a better offer somewhere else, etc. 24 hours is the longest you can leave a candidate waiting. You have been warned
edit: I am in SFBA. Your reality may be different. People have spilled some 2 trillion dollars onto the area in the past 2 years. A lot of that is going to software engineers as everyone tries to shove AI down consumers' throats. Rents are up 60% in 12 months, which is not the sign of a cold employment market :)
https://www.citadelsecurities.com/news-and-insights/2026-glo...
With my current job search I've got the sense that sf is once again the place to be. Everything else kind of sucks, lots went back on remote work.
and fwiw i dont know any swes struggling to find work personally
swe is so broad and in bubbles its hard to get an objective analysis
https://x.com/perborgen/status/2025890393166917857
https://fred.stlouisfed.org/series/PAYEMS
Yes this sucks, but this mode of operation for our society was repeatedly chosen through centuries of experimentation. We all asked for this, literally.
To avoid laying them off in next year's job market.
Dripping a 10% cut every year for the next four years when you *know* that you're going to do it is cowardice.
We are no longer in a zero-interest rate environment, so I think those experiments are more costly than they were a few years go
some companies are in the position to go for moonshots and block hasn't panned out
But I would think 5 months paid time before you have to go on state unemployment is significantly better than the WARN act minimum of 60 days of notice or pay or the alternative of a campaign to raise attrition. Looks like recent google/meta layoffs are 4 months, so it's 25% better than that. I always thought I wanted to get a package, but I recognize that I would probably not have been happy if it happened.
So does being dumped from a relationship. You might not be able to find another relationship in 6+ months. But I don't think people would seriously propose that people should therefore not be able to leave a relationship.
Or perhaps public doesn’t owe corporates bailouts when push comes to shove?
I know we have to balance inefficiency and optimal allocation of resources... but I agree it doesn't seem optimal for social wellbeing to remove people from their access to health and risking their ability to house and feed themselves without a financial need to do so (like Block going bankrupt).
Humans are violent, self-centered tribalists. What species are you referring to? Not homo sapiens.
I dispute that this is a fact. Maybe within a small group, but startups shouldn't be possible if masses of more cooperating people led to better outcomes. A large company should always win there and that does not happen.
> What is the point of organizing socially if not for the benefit of all society members?
We don't come anywhere close to this on a global scale. Most countries aren't this way on a national scale.
Stability means removal of volatility, which means to stay stable they end up becoming more generalised, rather than the laser focus a small team like a startup can have. That laser focus can work out when applied to the right problem at the right time, but is very much not a guarantee.
This is one way of making an all-in bet on AI.
>we're not going to just disappear people from slack and email and pretend they were never here. communication channels will stay open through thursday evening (pacific) so everyone can say goodbye properly, and share whatever you wish. i'll also be hosting a live video session to thank everyone at 3:35pm pacific. i know doing it this way might feel awkward. i'd rather it feel awkward and human than efficient and cold.
Well that's interesting, wonder if we'll actually get a proper accounting of which departments take which cuts.
If a small business needs to send a replacement widget to a customer in a foreign country, they label it "$0 value" (as it's a free replacement part) and mail it with a swipe of a corporate credit card.
If a large business needs to do the same thing, the sender asks the mail room, giving them a budget code and delivery address; the mail room contacts the widget designer for a HTS code, size and weight; then contacts their shipping broker for a quote; then contacts the finance department to raise a purchase order; the finance department contacts the budget code owner for spend approval; then raises a purchase order; then forwards it to the sender who forwards it to the post room who forwards it to the shipping broker who arrange a collection. Later the shipping broker will send the post room an invoice against the purchase order, which they'll send on to finance, who'll query the sender who'll approve paying the invoice.
> Even if the AI piece isn't really true - smaller flatter teams will move faster anyway.
Quite possibly - but you have to remember to remove the bureaucracy, not just remove the people who operate the bureaucracy. If you try to do the large business process with the small business team, it'll be even slower.
Once projects get bigger they need more devs and also move slower.
Put a team of 1-3 devs on MS Word and see how fast they move...
i.e. we finally decided to audit head count from post covid-era.
> paired with smaller and flatter teams
i.e. management was axed
I have 100 people that can now do the work of 200 people thanks to a new tool.
How is the logical response to fire half of them and bring my productivity back to where it was before?
But these things happened: 1) Musk has shown that Twitter can operate with 5% (approximately?) of the workforce he inherited; 2) laying off a lot of people was seen as a sign that the company was in trouble, but not now because; 3) artificial intelligence makes point 2) not a semi-desperate move, but a forward-thinking adjustment to current and future technology development.
I've been out of work for almost a year now, after being laid off, and I think it's very unlikely that I'll ever return (not because of my choice but their choice) to work in the tech industry as a W2 employee. Oh well.
They grew to 11000
Now they’re going to shrink to 6000
The whiplash from ZIRP days to whatever AI cost restructuring happening today is massive
I think the potential for productivity is there with AI, but this size of a cut based on speculation made no sense. This is actually reasonable in this light and is probably for the best. I'll be curious to see if any employees, former or otherwise talk about it
and the best part is that when others follow, ZIRP will be back.
this is going to be a proper mess.
In my country, this action would be literally illegal.
Even in countries where it isn’t, it feels highly immoral. “I’m not in any kind of pressure to do this but I’m choosing to shed the people who created my wealth for greater personal gain”.
What I don’t understand is why. There’s a natural churn at each company. Of course it’s not 40%, but probably 4-5% per year, but I doubt the company freezes hiring and they are not pressured to do this.
Interesting that this is your takeaway; it seems that this is effectively an investor-friendly way to admit that Block hired too many people over the course of the pandemic and doesn't necessarily have obvious expansion/growth (that would require people to write more software) on the roadmap.
"Oh the business isn't going too well so we need to lay people off" - said no CEO ever, but "AI go brrrr" makes investors happy!
If they can organize employees to make more money, they will. But they can't and admitted it.
I hope this gets drilled into the heads of everyone who sells their labor. The company is profitable, and Jack could have kept 4000 people employed with no difference in outcome, instead, he chose this.
assuming $150,000 average salary thats around $600,000 totally so that increases the yearly profit by about 30%.
did he suggest no difference in outcome in terms of profits?
Society provides support to this kind of decision, it's obvious why it happens.
And nobody really believes this whole "we got too efficient" so now we don't need 40% of our company anymore.
If AI really improves efficiency and allows the company's employees to produce more, better products faster and thus increase the competitiveness of a company... then why does said company fire (half of!) its staff instead of, well, producing more, better products faster, thus increasing its competitiveness?
Am I naive or is AI a lie when marked as a cause?
Why is it that us employees are gaslighted with the FOMO of "if you don't adopt AI to produce more, then you'll be replaced by employees who do", and why do these executives don't feel "if you fire half of your employees for whatever reason, you'll be outcompeted by companies who... simply didn't?"
The future rocks
We're about to see a lot of public SAAS companies do the same and rebrand as "AI" first
"Thanks to LLMs, each worker can do twice the work they could before. Naturally we are firing half the company because ... business is good and ... too much productivity is bad?"
this is an incorrect take. The company needs a certain amount of productivity at each point.
If not, how would you explain that they had only 10,000 employees and not 20,000? They could still remain profitable.
LLM's increased productivity and each person could do approximately 20% more work so it follows that they need fewer people. If not, they should have had 12,000 to begin with.
Imagine you run a mowing service with 4 employees. Suddenly 2 more people volunteer to mow yard for your company for free!
Is your reaction to fire two of the paid employees and keep mowing the same number of yards (with reduced payroll costs), or to expand the business to mow more yards?
Which of those responses feels more in line with a "strong and growing" business that is "continuing to support more customers" and has "improving profitability"?
There’s proof of tech firms engaging in explicit collusion back in the 00’s.
https://paulgraham.com/startuplessons.html
Now some here are about to experience a repeat of the years 2000 and 2008 put together.
I reckon this move is related to bitcoin doing poorly. A LOT of their revenue is bitcoin related and I reckon they realized they're going to have an absolute stinker of a Q1 '26 result...
I wonder if this is the beginning of a new wave of layoffs across the industry like we had in 2022.
I think this is pretty agreeable, spanning layoffs into a monthly/quarterly "Hunger Games" is very damaging to employee morale.
2. Will other tech firms consider such large layoffs in the near future?
Or how about your revenue lines are in retail and peer-to-peer finances, primarily for small-to-medium sized businesses and low-to-mid income individuals, primarily in the US market, all of which are struggling from tariffs and economic slowdown in their brackets.
Nah...definitely the AI.
I don't buy anything this weirdo says.
Assuming the premise of profitability and a sound business then this sounds like a failure of product if anything. It just doesn't follow for me that when you see more productive teams the immediate answer is that you need less people. Especially for silicon valley types this seems antithetical to scaling.
Thinking of it in two ways
- Yes you could (in theory but I still argue not 100%) cut workforce and have a smaller # of people do the work that everyone else was doing
Or
- You could keep your people, who are ostensibly more productive with AI, and get even more work done
Why would you ever choose the first?
- if yes, then why didn't they hire more employees?
- if no, then isn't it obvious that they don't need more than 6,000 employees who are approximately 20% more productive? if the 6,001th employee can add profit then surely 10,001th could've also added right?
If AI tools really are a significant multiplier to productivity, companies should be hiring more people to take advantage of that multiplier.
If you suddenly have the ability to get more output per dollar spent, a healthy business should respond by spending more dollars, not spending less to keep output the same.
at the previous productivity it was 10,000 employees. not 10,001 nor 9,999.
at the current productivity it is 6,000.
why are you so sure that the 6,001th employee can increase profits but not the 10,001th employee before AI?
1. companies that are not doing well (slow growth, losing to competition etc) or are in a monopoly and are under pressure to save in the short term are going to use the added productivity to reduce their opex
2. companies that are doing well (growth, in competitive markets) will get even more work done and can't hire enough people
my hunch is block is not doing as well as they seem to be
One company I worked for did this. It felt weird to everyone. But they did give a slightly better severance to those that stuck out their contracts so it worked out slightly better for them.
Please don't post sneering comments on HN. The guidelines make it clear we're trying for something better here. https://news.ycombinator.com/newsguidelines.html
For some reason he deliberately avoids using the word 'artificial' here.
Come on now, it's not going to be the only round.
EDIT: I guess if it comes with 300% raise I'd pause for a bit to think about it, but otherwise absolutely not.
Once again, this is "AGI" in it's most direct and absolute version with zero fluff.
I unfortunately predicted more layoffs will occur back in 2025 [0] and I see only but acceleration on this.
[0] https://news.ycombinator.com/item?id=46307549
Given it’s an ambiguous term, sure. But I don’t think a better collaborative AI is what anyone imagined when we said AGI years ago.
> Given it’s an ambiguous term, sure. But I don’t think a better collaborative AI is what anyone imagined when we said AGI years ago.
He scare-quoted AGI. I think what he means is we won't experience AGI as some kind of utopia of abundance (which is how it is hyped to us), we will experience as massive and brutal layoffs.
Actual AGI will be worse. If Block had that, Dorsey wouldn't be laying off 40%, he'd probably lay off 80% or more.
They're cutting 40% (edit: the post actually says "nearly half") of the workforce (4k out of 10k). That's huge.
The severance is 20 weeks of pay + 1 week per year of tenure, stock vesting through May, 6 months of healthcare, their corporate devices, and $5k cash.
This was mostly born out of counter signalling the businesses that valued serious people over competent people in the 20th century.
But, like with all things, the pendulum has swung too far in the opposite direction. I believe the next wave of tech countersignalling will be people who actually do take themselves seriously, maybe even dress in suits, etc..
Maybe he should have had AI fix up the grammar/spelling for him...
also you're fired
No matter what he wrote, it was going to be insulting.