https://www.marketwatch.com/story/block-plans-to-lay-off-nea...
https://www.marketwatch.com/story/block-plans-to-lay-off-nea...
I wonder if this is the beginning of a new wave of layoffs across the industry like we had in 2022.
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.
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?
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...
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.
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.
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.
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
EDIT: I guess if it comes with 300% raise I'd pause for a bit to think about it, but otherwise absolutely not.
Square’s ecosystem is expected to contribute $1.77 billion, while Cash App is expected to provide $58.3 million to transaction revenues.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.
also you're fired
No matter what he wrote, it was going to be insulting.
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..
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 :)
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://www.citadelsecurities.com/news-and-insights/2026-glo...
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
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.
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.
some companies are in the position to go for moonshots and block hasn't panned out
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 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.
Humans are violent, self-centered tribalists. What species are you referring to? Not homo sapiens.
Or perhaps public doesn’t owe corporates bailouts when push comes to shove?
For some reason he deliberately avoids using the word 'artificial' here.
Come on now, it's not going to be the only round.
I don't buy anything this weirdo says.
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.
I can make a lot of revenue selling $100 bills for $10. I'm not sure it'd "pan out".
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)
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.
They grew to 11000
Now they’re going to shrink to 5000
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
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 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.
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
2. Will other tech firms consider such large layoffs in the near future?
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 think this is pretty agreeable, spanning layoffs into a monthly/quarterly "Hunger Games" is very damaging to employee morale.
"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?"
There’s proof of tech firms engaging in explicit collusion back in the 00’s.
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"?
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.
We're about to see a lot of public SAAS companies do the same and rebrand as "AI" first
I’ve worked in LATAM fintech for years. The pattern Jack describes — “intelligence tools paired with smaller and flatter teams” — is already playing out across the industry. The compliance teams that used to need 15 people to handle KYC/AML across multiple jurisdictions are being compressed to 4-5 people supervising automated pipelines. Not because the work disappeared, but because the ratio of human judgment to routine processing flipped.
The honest part of this letter is the admission that gradual cuts would have reached the same number. Most companies do the slow version and pretend each round is the last. Dorsey is essentially saying “we modeled our org with AI-augmented productivity and this is the number we landed on.” Whether you think that’s brave or ruthless depends on whether the model is right.
The part that concerns me: “customers can build their own features directly, composed of our capabilities.” That’s a pivot from platform to infrastructure. It’s also a bet that your remaining 6,000 people can serve the same customer base with composable APIs instead of bespoke
I hope this gets drilled into the heads of everyone who sells labor. The company is profitable, and Jack could have kept 4000 people employed wrh not 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%.
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”.
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.
The future rocks
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...
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.
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.
chilipepperhott•1h ago
toomuchtodo•1h ago
https://paulgraham.com/startuplessons.html
garbawarb•1h ago
AbstractH24•1h ago
rvz•1h ago
Now some here are about to experience a repeat of the years 2000 and 2008 put together.
SilverElfin•57m ago
nxm•52m ago
busterarm•1h ago
Bombthecat•54m ago