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Layoffs at Block

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Re: Layoffs at Block

#841

Post by ProjectArcturis »

jalapenos wrote: post #794
DebtDeflation wrote: post #694

Earlier quoted context omitted.

> the absurd overhiring that they did in 2022 and 2023 The overhiring took place from mid 2020 through mid 2022. The reversal into layoffs started in late 2022 and was in full swing in 2023. While the overhiring problem was real, the correction was largely complete over a year ago. The layoffs we're seeing today have nothing to do with overhiring and everything to do with managing earnings to sustain equity valuation…

> managing earnings to sustain equity valuations That's an interesting take, so eventually they'll just run out of these tricks and at that point the valuations will burst?

No, there'll always be a new trick.

Re: Layoffs at Block

#842

Post by kevml »

bionaut wrote: post #799
salviati wrote: post #636

Earlier quoted context omitted.

It might actually be that they mean what they say. If you look at the numbers, this doesn’t resemble a company cutting because it’s in trouble. Block is profitable, gross profit has been growing double-digits year over year, and they’re guiding roughly ~18% gross profit growth into 2026 with strong expected expansion in adjusted operating income and EPS. That’s not a balance-sheet emergency. You can argue they overhi…

Or it just really is AI. Maybe Dario Amodei saying this tsunami is coming and people are arguing it is not a tsunami and just a trick of the light are wrong. We have had a giant bubble in white collar bullshit jobs the last 15 years and AI is going to pop that bubble incredible fast. That doesn't mean the brilliant programmer is going to be replaced by Claude Code. The brilliant programmer type + AI what is going to…

There’s definitely going to be a shift over time. But it’s clearly not here just yet. So why preemptively lay off anyone? Isn’t that inefficient?

Re: Layoffs at Block

#843

Post by grey-area »

squidbeak wrote: post #811
grey-area wrote: post #666

Earlier quoted context omitted.

Apart from the bit where he lays 4000 people off, but himself is untouched. Oh and the bit where he claims AI efficiencies are the reason. If I had to do this to a company I’d built I’d fire myself too. It’s an admission of a massive failure of leadership.

An external tech appears that eliminates the need for human labor. But a CEO acknowledging its arrival and adjusting for it is a 'massive failure of leadership'?

Well that's certainly the story that Jack is selling.

We'll see in time whether his company makes extraordinary gains to match his claims or whether he is just covering for his own incompetence.

Re: Layoffs at Block

#844

Post by marcyb5st »

danpalmer wrote: post #353
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…

> 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 ov…

I don't agree about the attrition bit.

On paper you're right, but in reality while doing so you give the incentive to higher-ups to set in place measures that make the life of their underlings atrocious. Mandatory RTO for no clear reason, jumping through hoops to get anything done, cut to budgets, ... . At least that what I experienced and talking with friends that was the case for them as well.

Re: Layoffs at Block

#845

Post by alephnerd »

lotsofpulp wrote: post #753
alephnerd wrote: post #306

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. 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…

> 1. Move to a Tier 1 tech hub like the Bay and NYC. If you get laid off, you will probably find another job in a couple of weeks due to the density of employers. > 5. Live lean, save for a rainy day, and keep your family and friends close. If you're not in a financial position to say "f##k you" you will get f##ked, and strong relationships help you build the support system you need for independence. All you have to…

The median SWE TC in the Bay Area is $272k [0]. After tax and a fully loaded Roth 401K that is around $143,000.

And that's just for 1 person. Your spouse (if you have one) is most likely also working in a white collar job as well which we'll impute with the median income in they Bay which is $75k [1], but in reality is an underestimate as your spouse is likely to work in a tech, biotech, medicine, finance, accounting, healthcare, or government adjacent field which would increase their income significantly.

Using the $75k imputed spousal take-home, that would make your joint household income after tax and both maxing out Roth 401k to be around $180,000.

Renting a 2-4 bedroom single family home in a family friendly locale like the Tri-Valley, South Bay, or the Peninsula comes out to around $4.5K/mo, which means you have around $126K per year.

Let's remove $26K due to household expenses (which I personally think is excessive - my household operates on $1.5K/mo and we live pretty extravagantly in San Francisco) and you end up with $100K in cash after a fully loaded 401K, taxes, and rent.

Put around 60-65% of that in a couple ETFs (expecting around 5%-9% returns) and the remaining 35-40% in liquid cash savings.

That means you have around $60K per year invested in easy to liquidate assets, around $50K per year invested for retirement, and around $40K per year in hard cash.

This is why it works and why most people in Tech still remain in the Bay or NYC (similar math).

If you cannot live lean with a 3 person household using the math above in the Bay Area - a region where the MEDIAN household income is $137K [2] - then frankly you have major character defects.

[0] - https://www.levels.fyi/t/software-engineer/locations/san-fra...

[1] - https://www.bayareaequityatlas.org/indicators/median-earning...

[2] - https://vitalsigns.mtc.ca.gov/indicators/income

Re: Layoffs at Block

#846

Post by turtlesdown11 »

yellow_lead wrote: post #672
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…

Its getting a bit repetitive to see this type of comment on every tech layoff letter

fawning over the CEO is certainly a type of tech poster

Re: Layoffs at Block

#847

Post by Octoth0rpe »

kevml wrote: post #842
bionaut wrote: post #799

Earlier quoted context omitted.

Or it just really is AI. Maybe Dario Amodei saying this tsunami is coming and people are arguing it is not a tsunami and just a trick of the light are wrong. We have had a giant bubble in white collar bullshit jobs the last 15 years and AI is going to pop that bubble incredible fast. That doesn't mean the brilliant programmer is going to be replaced by Claude Code. The brilliant programmer type + AI what is going to…

There’s definitely going to be a shift over time. But it’s clearly not here just yet. So why preemptively lay off anyone? Isn’t that inefficient?

> But it’s clearly not here just yet.

That's not clear to me, and apparently not to Block.

> There’s definitely going to be a shift over time.

Yep, and as the transition happens, it'll probably be bell-shaped. Someone will be on the left side of the bell, and someone will be on the right side. Block has chosen to be on the left side.

Re: Layoffs at Block

#848

Post by tshaddox »

paxys wrote: post #273
rco8786 wrote: post #245

Earlier quoted context omitted.

> 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 t…

Exactly. Square was the first great checkout system, but now a decade and a half later every other system is good enough that retailers aren't going to pay extra for a flashier app.

Over the last 10 years or so in SF and LA, I’ve seen so many countless POS systems at restaurants and small businesses that it’s difficult to believe that Square is anything more than 1 player in an enormous field.

And businesses I frequent over many years seem to change their POS systems often. I’ve always assumed that every year there are a bunch of new startups using their VC funds to give away free iPad minis. When the cheap hardware breaks or the software company goes under, there’s always a new one to take its place.

Re: Layoffs at Block

#849

Post by lotsofpulp »

alephnerd wrote: post #845
lotsofpulp wrote: post #753

Earlier quoted context omitted.

> 1. Move to a Tier 1 tech hub like the Bay and NYC. If you get laid off, you will probably find another job in a couple of weeks due to the density of employers. > 5. Live lean, save for a rainy day, and keep your family and friends close. If you're not in a financial position to say "f##k you" you will get f##ked, and strong relationships help you build the support system you need for independence. All you have to…

The median SWE TC in the Bay Area is $272k [0]. After tax and a fully loaded Roth 401K that is around $143,000. And that's just for 1 person. Your spouse (if you have one) is most likely also working in a white collar job as well which we'll impute with the median income in they Bay which is $75k [1], but in reality is an underestimate as your spouse is likely to work in a tech, biotech, medicine, finance, accounting…

It was mostly a joke about the flippant way your comment added in "keep your family and friends close" after moving to highest cost places in the world.

First, many people may not want to move, even if their kids or siblings move. Other people have friends and family too.

Second, many people may not have the skills or drive to get the "median" paying job necessary to live the desired quality of life.

Third, many people and/or their family may not be healthy enough to afford dual high income households.

Obviously, earning a lot of money while spending minimally is a path to success, and obviously moving to the Bay Area and NYC is one of the higher probability routes to success and upward movement (at least financial), but it's not without other costs.

For those with the desire to attain that financial success, I encourage them to follow the playbook. But I would not expect them to keep friends and family close.

Re: Layoffs at Block

#850

Post by dzonga »

Straight from the horses mouth:

>> yes we over-hired during covid because i incorrectly built 2 separate company structures (square & cash app) rather than 1, which we corrected mid 2024. but this misses all the complexity we took on through lending, banking, and BNPL. and that we’re now targeting $2M+ gross profit per person, 4x our pre-covid efficiency, which stayed flat at ~$500k from 2019 until 2024. we have and do run an efficient company... better than most.

https://xcancel.com/jack/status/2027290756793135253

I.E OVER-HIRED

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