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Layoffs at Block

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Re: Layoffs at Block

#531

Post by Bluescreenbuddy »

alephnerd wrote: post #306
tombert wrote: post #270

Earlier quoted context omitted.

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 u…

> 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. Partially. The first nail in the coffin was the change in assumptions around output. Before 2023, there was an assumption that more bodies means more output. After the massive X/Twitter…

Twitter is just a misinformation machine now. They got rid of anyone that made it a decent place. No more pesky moderation, sales and ad teams, etc. as long as it’s up and the sock puppets can foment dived, it’s serving its purpose.

Re: Layoffs at Block

#532

Post by meerab »

senko wrote: post #254

This is one of the best (if not the best) layoff letters I've seen online (no affiliation, don't know anyone working there, purely outsider perspective). * Severance packages upfront because realistically that's what everyone worries about first. * Reasoning second. I appreciate the one clean cut vs prolonged bleeding. * Owning the decision and respecting the people that got you there. Opting for an awkward allhands…

Spot on. This tweet will go down in history — right next to Jack's first tweet. We all understand businesses require difficult decisions. This is one of the best layoff letters I've seen. Short, honest, and human.

Re: Layoffs at Block

#533

Post by rytill »

missedthecue wrote: post #289
singpolyma3 wrote: post #98

Earlier quoted context omitted.

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

This used to be the accepted standard but it seems today that people think any amount of profit should primarily be directed toward paying wages. (either bigger wages to existing employees, or to new employees, or both). You have multiple sub-conversations in this very comment section wondering aloud why Block didn't invent make-work or "new projects" to keep the 4,000 employed. The idea of a job being some task that…

> that corporate profits would rise while consumer spend dropped are literally incompatible realities

These are not incompatible realities.

I would be willing to accept the statement that corporate revenues increasing and consumer spending decreasing are incompatible realities.

But it’s feasible to think the following occurs:

- labor income falls

- consumer spending drops

- corporate revenues drop

- corporate profits moderately increase because profit margins get much higher

- government deficit continues (which, from an accounting perspective, means other accounts are in surplus, potentially US corporations)

I’m not saying I strongly predict the above, necessarily! I just don’t think it’s correct to say it’s not a conceivable reality.

Re: Layoffs at Block

#534

Post by swingboy »

If AI really was the cause, why would a company eliminate people who could use it to multiply output and widen the gap between them and their competitors?

Re: Layoffs at Block

#535

Post by dehrmann »

paxys wrote: post #101

Square/Block stock peaked at $273 in Feb 2021 and is currently at $54. Taking away the Covid bubble the stock has been completely flat since 2018, almost 8 years, while the S&P 500 returned nearly 200% in that same period. So I'm not buying the whole "the company is doing great! The layoff is just because of AI."

If AI makes people twice as productive and you're a mature software company chasing marginal value, if the marginal value people added was worth it before AI, surely more marginal value at the same cost is better. It's also the wrong side of the AI curve to be on. Maybe AI will replace dev jobs, but why not wait to find out? And if it does, prompt-coding is a different skill than traditional coding, and it's not what you interviewed people for, so you don't even have a guess as to if you're keeping the right people.

Re: Layoffs at Block

#536

Post by fastball »

danpalmer wrote: post #457
belval wrote: post #436

Earlier quoted context omitted.

> you could reduce headcount via attrition which is better in some ways I don't think reducing via attrition is better for the company, for the employees 100%, but attrition would be your people moving to other companies and retirement. It means that you are effectively bleeding your people with options (usually above average) and those with the most experience in favor of "the rest".

It's a nuanced trade-off. It's worse for the company as you said, it may be worse for the employees because some will leave from burnout without severance, those remaining will have more work to do typically. But my point was that what was presented was a false dichotomy and that framing it as such is disingenuous to employees receiving those comms.

It is not a false dichotomy. Reducing headcount via attrition is a subset of "prolonged bleeding", if you've already decided it needs to happen.

Re: Layoffs at Block

#537

Post by pembrook »

torben-friis wrote: post #120

>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…

This is also why your countries social welfare systems are teetering on fiscal insolvency and deficits are ballooning.

Your inefficient and non-competitive private sector isn't growing fast enough to fund your growing demand for free stuff in the public sector.

Maybe if companies and entrepreneurs were allowed to shift more rapidly to meet market demand your legacy giants (and social welfare meal ticket) wouldn't be sitting ducks for the Chinese to swoop in and kill.

Re: Layoffs at Block

#538

Post by marcus_holmes »

hn_throwaway_99 wrote: post #479
atomicnumber3 wrote: post #393

Earlier quoted context omitted.

The value in SaaS was never the code, it was the focus on the problem space, the execution, and the ops-included side. AI makes code "free" as in "free puppy".

Sometimes, but I think there are some SaaS products whose business model is really under threat. Look at PagerDuty. Their PE ratio is like 4.4 . They have a lot of existing customers but virtually no pricing power now and I imagine getting new business for them is extremely difficult.

Canva is my go-to example - you can just get NanoBanana/whatever to generate and iterate on the image. Same for all those stock photo services. I used to use them a lot, now I just generate blog images

Re: Layoffs at Block

#539

Post by keeda »

deadbabe wrote: post #500
keeda wrote: post #452

Earlier quoted context omitted.

> I swear people should start blacklisting CEOs and refuse to work under them if they're part of the blacklist. Look at the job market. They know they can get away with it and so they don't care. My current theory is that this is partly why executives are desperate to get AI to work, and why investors are ploughing billions into AI. They know they've burnt too many bridges, and they need AI to work so they never have…

Your theory is wrong. Someone will inevitably have to prompt AIs, CEOs and other executives are NOT going to be doing it themselves. The people driving those AI will have greater leverage as less and less people choose a career in tech. Also, when an AI fucks up in a way only a human can fix, the human must be available. What I see more likely is a future where software engineers do even less work but frustratingly y…

Agreed, and the AI wranglers will be the equivalent of architects and staff+ engineers today, and they will be paid handsomely. BUT! They are a pretty small fraction of the current developer workforce. The remaining junior-to-mid level engineers will have to uplevel themselves while having no opportunity for hands-on experience to do so as they get laid off in bulk.

And note, this pattern is going to repeat across the entire white collar workforce, because the same pyramid scheme holds everywhere in knowledge work.

A new equilibrium will be found, but that will be years, maybe a decade+ away? That's the period of turmoil I am concerned about.

Re: Layoffs at Block

#540

Post by daxfohl »

anukin wrote: post #380
daxfohl wrote: post #48

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 t…

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?

To be fair I've been all over the map on this. But lately neither of these scenarios seemed quite right. Reflecting on my own experience, I find that sometimes AI is great, but sometimes it feels like a return of https://xkcd.com/303/. So, putting 2 and 2 together and picturing it from C-level perspective, this is where I landed.

No data points yet, except now this one.

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