I'm convinced that these "AI Layoffs" are these companies trying to save face from the absurd overhiring that they did in 2022 and 2023 because apparently they thought that these no-interest loans/free money would just last forever.

No one really "knows" how to grow businesses so the easiest way to spend a lot of money quickly is hiring lots of people, whether or not they are "necessary". Then this free money dries up, interest rates go back up, and now they're stuck with all these employees that they didn't actually need.

Some companies like Google and Microsoft just accepted that assholes like me will call their CEOs incompetent and fired lots of people in 2023, but I think other CEOs were kind of embarrassed and held off. Now they can use AI as a scapegoat and people won't act like they were idiots for hiring twice as many people as they needed.

Also, I got declined by Block a year ago. Glad I was now.

> 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,

I worked at Block for ~6.5 years up until 2024. This is mostly correct.

They were the first to market for portable CC readers, and segued that into "high tech" POS systems which, to be fair, were significantly better than the available alternatives at the time. But flashy hardware design and iPads isn't really a moat, and the company never developed a great muscle for launching other initiatives. The strategy was "omnibus" - trying to do everything for everyone and win on the ecosystem efficiencies...but when none of your products are particularly standout it's hard to get and keep customers.

CashApp being the notable exception, because they gave the founder carte blanche. It was effectively 2 different companies operating under the $SQ ticker. They even had their own interview process for internal transfers. Although ironically the engineering standards on the CashApp side of the fence were significantly sloppier than on the Square side...to the point where I stopped using CashApp and stopped recommending it to friends once I transferred to that org and saw how the sausage was made.

I think this is pretty spot on. It's already been mentioned a ton before how many of these "we're having layoffs to better utilize AI" stories are really just cover for axing lots of unprofitable projects that were birthed during the ZIRP/early pandemic era.

I think the additional wrinkle with AI is that it's having an impact, just not really in the way these execs are saying. Before ChatGPT, there was lots of speculative investment into SaaS-type products as companies looked for another hit. Now, though, I think there is a general sense that, except for AI, Internet tech (and lots of other tech) is fully mature. This huge amount of investment in "the next big tech" thing (again, ex-AI) is just over, and the transition happened pretty fast. Blockchain, NFTs, the metaverse, Alexa and other voice assistants, yada yada, were all ventures looking for something as big as, say, the rise of mobile, and they all failed and are getting killed basically simultaneously.

I think the scary thing going forward is that, over the past 25-30 years or so, tech provided a huge amount of the average wage growth, at least in the US. Even if AI doesn't result in huge employment reductions due to productivity gains, the number of high quality jobs in the AI space is just a lot smaller than, say, the overall Internet space. Lots of people have commented here how so many of these AI startups are just wrappers around the big models, and even previous hits are looking dicey now than the big model providers are pulling more stuff in house (and I say this as a previous Cursor subscriber who switched to Claude Code).

I'm curious what future batches of YCombinator will look like. Perhaps it's just a failure of my imagination, but it's really hard for me to think of a speculative tech startup that I think could be a big hit, and that's a huge change for me from, say, the 2005-2020 timeframe. Yeah, I can think of some AI ideas, but it's hard for me to think of things beyond "wrapper" projects on one hand and hugely capital intensive projects for training models on the other.

> 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.

Before people jump into existential despair here about the software field, do we know the breakdown of roles? How many were tech vs support, operations, HR, and other roles?

This is a very interesting take unlike the usual doom and gloom narrative or jevons paradox optimists. Are there any data points which made you reach these conclusions?

Jack Dorsey likes to do side quests it seems, I see him in many things

I hear about CashApp but I don’t know anybody who uses it. What’s the selling point?

In what sense did CashApp not pan out? $16b revenue. Too early to say whether Afterpay will work out but looking good so far

Option 1) You’re right. They’re screwed because they won’t be able to keep the lights on and these layoffs make it worse.

Option 2) AI can just vibe code what block needs now, or maybe in a few years. Laying off talent makes sure there are people on the market to do the vibe coding, and that block will not be able to respond to widespread competitive pressure. They’re screwed and these layoffs make it worse.

Of course, they could realize they magically have 2-10x the engineering and organizational capabilities they used to and improve the product. They won’t because late stage capitalism only cares about weekly stock swings and graft so it can’t plan all the way to end of quarter anymore.

> … using the AI to make their own lives easier rather than to work more efficiently.

These are not mutually exclusive. How does making my “own [work life] easier” not translate into “work more efficiently.”

During the massive post-pandemic hiring spree, there were a lot of threads in the vein of "why does [MATURE STARTUP] requires X,000 developers?" and I think those questions were maybe prescient. These companies have been spending free venture funds on whatever and acquiring headcount for the sake of headcount. A lot of them have tried to and failed to be "everything apps" and now they are really sitting on mature, stable and profitable platforms that don't need to move fast and break things. They just need to not crash. And the result is they need far fewer people.

> 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 :)

>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?

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.

"Why not … try new industries, play around, try to become the next Mitsubishi or Samsung or General Electric."

Betting the company on becoming a conglomerate is just not a great strategy. It is almost always smarter to focus on what you do best, "core competencies" in MBA-speak.

Positive EV bets are hard to come buy. There aren't an unlimited number of them.

> 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

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

Is this actual five months severance? Or five months base pay with no vesting?

Most people are making >50% of their income in RSUs.

If you think 5 months is bad, try none. Job loss is a reality. Don’t become emotionally invested in it never happening to you.

Most C levels adhere to the “cattle, not pets” idea too.

No, the job market is dead outside of implementing workflows for AI.

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

Wrong? A company doesn't owe anyone a job. Either they need the employee or they don't.

because that doesn't increase shareholder value, at least in the short term, which is all anyone cares about now.

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."

Because they’re not running a charity

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.

> I appreciate the one clean cut vs prolonged bleeding.

That's a false dichotomy, you could reduce headcount via attrition which is better in some ways.

There's also no reasoning on product impact. Is the strategy to cut products that aren't making money? Is the strategy to cut 40% across everyone because everyone can go faster?

> Owning the decision

Does it? It came across to me as an inevitability of AI, not "we over-hired". Layoffs are always a mis-management issue, because the opposite (hiring) is a management issue. If management failed to see where the market was going and now needs a different workforce, that's still a management issue.

> respecting the people that got you there

There's words, and there's money, and on these it's pretty good. But there's also an empathy with the experience they're about to go through and I'm not sure there's much of that here beyond the words. To do this well you'd need to think through what folks are about to go through and look for ways you can positively impact that beyond actions today. I've seen some companies do this better, helping teams get re-hired elsewhere, splitting off businesses to sell to other companies, incubating startups, there are lots of options. Hard, especially at this scale, but possible.

> But realistically, you can't pen a better (or, well, less bad) layoff announcement.

And this is the crux of my point, I really think you can. This was a good one, one of the better I've seen, but it's still within the realm of SV companies laying people off. In some companies, countries, industries, this would look very different, and better.

"owning" the decision doesn't mean anything. It's just words.

@grok remove the corporate jargon and explain it in a direct and candid way in a single sentence

@grok We're slashing the company from 10k to under 6k people because AI plus tiny teams now let us do the same work with way fewer bodies, and the CEO would rather gut half the staff in one brutal move than bleed out slowly over years.

I am curious why this got so popular, it really is the same thing, am I missing something? Is it because of elon/jack dynamics?

We know they're not...

> In its fiscal fourth quarter, Block reported revenue of almost $6.3bn, in line with Wall Street expectations. Its earnings tumbled to 19 cents a share, owing to a $234mn hit — or 38 cents a share — on its bitcoin holdings.

AI is the logical, counter proof reason, I feel it serves as a scapegoat so perfectly they pretend it replaces people.

Feb 2021 was peak covid tech bubble stemming from ZIRP. There are a number of companies that hit highs during that period that they'll likely never see again (or for quite some time) despite being profitable.

What do you do now?

1) This is by any source I can find, incorrect. Twitter had ~8,000 employees when Musk bought it. After layoffs that was trimmed to a low of around 1,500 employees (19%), and today it has around 2,800 employees.

Also worth mentioning that a lot of Twitter's products are built on X.ai which has 1,200 core employees on Grok with 3,000+ on the Datacenter build-out side.

> Musk has shown that Twitter can operate with 5% (approximately?) of the workforce he inherited

Is X profitable? I don't think the argument was that Twitter couldn't _operate_ with 5% of the workforce (i.e. skeleton sysadmin crew), the issue was whether Twitter could make money and remain a viable business.

It seems that Twitter is no longer a viable business (i.e. less advertising spend, decline in users - especially high-value advertiser targets who now spend more time on LinkedIn, etc).

> laying off a lot of people was seen as a sign that the company was in trouble, but not now

I agree that saying you are laying people off because of AI is a lovely narrative for failing companies!

Excuse me for making some pretty sharp statements. Twitter is objectively a worse product now. Musk is a deeply uncreative person who doesn't seem to actually like people and attracts people to him that are the same way. This shows in his truly uninspired products. Tesla is way behind the Chinese now. xAI is a copy cat. SpaceX seems to be taking old Soviet ideas. Musk I go on?

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.

Their shareholder meeting is later today. Maybe we'll find out.

> i'd rather it feel awkward and human than efficient and cold.

So deeply ironic considering he claims he’s doing this because AI can do the jobs these people did.

These billionaires will learn one day that removing humans doesn’t stop at the bottom layer. It’ll continue to happen at layers above until their own position starts to be put into question. They’ll realize those people who are removed due to AI taking their jobs still need to put food on their tables. It’ll take time, but ultimately there are only so many ways that can go. The answer will be extreme taxation on the billionaires.

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.

> but something has changed

i.e. we finally decided to audit head count from post covid-era.

> paired with smaller and flatter teams

i.e. management was axed

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

I am much more interested in how headcounts compare to 2019 than to 2025 (let alone 2022). Certainly, this is not a comfort to anyone who is losing their job. But I don’t remember anyone panicking about an unemployment crisis pre-pandemic. A lot of people are getting their lottery ticket taken away, which is less than ideal, but we’ve got a long way to go before breadlines.

> our business is strong. gross profit continues to grow, we continue to serve more and more customers

and the best part is that when others follow, ZIRP will be back.

this is going to be a proper mess.

They're back to 6,000 not 5,000.

it's already there in a large part of the country. being a swe in SF or NY is way different than being a swe in Birmingham, Alabama or Tampa, Florida or even a truly large city like Houston where you're writing internal software for a bank, or an oil company, or a hospital system. Most software jobs are not sexy startups or working for Netflix

Does the lowercase convey authenticity or lack of care?

Ha glad to see I'm not the only one irked by that.

i like it. it's how you show you didn't use ai to write the message.

Your country also pays less and has fewer jobs.

Increasing the cost to fire, increases the cost to hire.

Can you point to the laws in your country that would make this illegal? I’m skeptical

This is part of the reason why American tech companies are so successful though. Being unable to lay off workers causes stagnation at companies where fast-development is paramount.

This is America. Like it or not.

What government makes it illegal for management to manage their company?

The refusal to simply capitalize the first letter of a sentence is so obnoxious.

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.

the epstein style guide says all lowercase and no punctuation is how you signal dominance from the top of the pyramid

To be fair X has significantly declined as an experience since Elon laid of 80%. I assume many of those he laid off were soft skill people that helped curate the experience.

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.

How magnanimous of him to let us all know of his magnanimity!

i don't think this is true.

assuming $150,000 average salary thats around $600,000 totally so that increases the yearly profit by about 30%.

what exactly is your point? you misinterpreted what he said. he just said that all 4K were being fired, and he would rather do it in one cut than gradually. he did not say the company's outcome would be different with those 4k vs. not

The odd thing I find with folks championing AI, and those who have effectively laid themselves off from their own job and now are basically just glorified prompt engineers, is that you're just making yourself obsolete.

AI will get better so much faster than you can adapt. One day you're happily vibe coding your 50th app, having other agents do your work for you. The next, you're worse than AI and you're redundant, and the clock is now ticking on your own head. This whole thing has shown that orgs don't care how the work gets done. If it's done by a human, cool. If it's done faster by an AI at a satisfactory level, even better.

Soon, though, the human won't be needed in that loop.

How do you make yourself useful here? What defense do software engineers even have? We can run alongside AI, try to outrun it, but it's just about futile. I work with junior devs at work and Claude is easier to instruct than them, and produces better code. In some ways it's more pleasant to work with, too.

This isn't really me shitting on the juniors so much as trying to raise how fucked we actually are. Sorta just feels like we're in this phase of pretending it's all happy as a coping mechanism for the future pain.

> 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!

Jack Dorsey looks like a homeless person and he spends his time meditating and talking about Bitcoin. People knew what they were getting into.

Because it will go out today anyway on the investor call or later via leak so might as well get ahead of it.

>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.

how do you layoff 40% quietly?

The CEO's last visionary move was to go all in on crypto, even renaming the company. Now he's a visionary again, but firing half the company instead of himself.

> 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 had to look this up - in the last 12 months total revenue was ~24 billion of which ~8.5 billion was from the Bitcoin "ecosystem"! Truly bizzare to stake your company on this...

https://d18rn0p25nwr6d.cloudfront.net/CIK-0001512673/55ca61a...

Except the concensus around the Amazon layoffs is that it's a shift in free cashflow to capex spent towards ram/gpus.

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.

https://paulgraham.com/startuplessons.html

It's simple: it's just a lie. We are seeing the goal of AI in action here, which is reducing payroll costs.

> 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.

Quite a few people on X mentioned Block went on a top-of-market acquisition spree (Weebly, Afterpay, Tidal) and tripled headcount during Covid.

For real. Very worried about when other CEOs follow suit and there is a flood of people into unemployment.

To be clear, I'm confident the impact of AI is going to be massive, and that massive impact is already underway rather than years away. But, separate from that, having seen it up close Block was bloated as hell

As someone that is only five years into their career at this point, I feel so helpless.

Even if they are right about quality, people on here vastly overstate the value of quality. From socks to dishwashers to airfares, slop is a valid product as long as it is cheap. Security from a business perspective has been proven not quite optional, but it is hardly catastrophic if it fails.

If you have good ideas that have a nice return on investment and leverage existing skills, sure. If you don’t have good opportunity laying around, best for the business to switch to maintenance mode, which means cutting staff. Or maybe cut staff, then use equity to buy growth via acquisition. It really depends on the business. Block’s growth has slowed so perhaps this would have happened anyway and AI is just what’s getting the blame.

Let's say AI increases productivity per capita by 50%

That means 50% of current headcount now has the same productivity as 100%

Now we calculate:

A = OPEX costs cuts by firing 50% of personal

B = Profit increase by the AI 50% productivity increase while not firing anyone

if A>B, reduce headcount

if B>A, reduce headcount and then increase workload on remaining employees until profits increase

> instead of, well, producing more, better products faster, thus increasing its competitiveness?

Probably because this is not Block's business strategy. If they could do this, then they would...

Agreed. Now that one more company has announced a big (40%!) headcount cut, other CEOs will feel like it is ok to do so now too (someone else stuck their neck out first, safe to pile on, "every one else is doing it", etc).

I expect to start hearing about more big riffs soon. :/

I wanted to come back to this to add that it's highly disrespectful to make a post/write a letter laying off 40% of your company and not bother to capitalize words properly.

Might be a small thing (no pun intended), but it irks me.

I've defended the style of writing previously, but I agree. This felt a little disrespectful.

I wonder if he writes his legal letters and letters to clients/investors like this, or does he have more respect for them?

AI: Affordable Indian.

i agree

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.

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?

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

I understand pausing completely ; can you explain how stopping the transfer of existing temporary workers will help?

Won't companies just offshore?

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.

Square payments, CashApp, Tidal (hi-fi music streaming), and some blockchain experiments

Square payment processing?

Block runs Square and Cash App among other payments tech.

[flagged]

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.

That's a UK legal thing: https://www.gov.uk/redundancy-your-rights/consultation

I think "entering into consultation" means HR calls you into a small conference room.

Square point of sale payment processing for businesses, Afterpay BNPL, and then the consumer side CashApp business. And Tidal Music streaming for some reason.

They hire people, and then they fire them!

CashApp

recently there has been a consistent drip of layoffs each day. they kind of chose all of the options

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.

They're going from over 10k employees to just under 6k. So more than 40%.

Yeah, im a chronic uncapitilizer in our work slack and HN, but if I put out a 'communication' then I always shift to 'regular' grammar.

Its an extremely annoying trend among a subset of the tech industry who think it makes them cool

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.

uwu i'm a smol bean

also you're fired

It was a 100% intentional act. These people simply don't care and they want that be known. It's in their ego.

There is no good way to announce layoffs.

No matter what he wrote, it was going to be insulting.

I found it completely unreadable, similar to reading code without syntax highlighting.

Maybe he should have had AI fix up the grammar/spelling for him...

Yeah I'm with you.

I write most of my emails purposely misspelling words / lacking proper capitalization so the recipient knows it wasn't written with ai. ¯\_(ツ)_/¯

Dorsey practically invented it.

It's AGI if it works. Didn't Salesforce lay off support people to replace them with AI but then the AI didn't work?

> 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.