alt Hacker NewsLayoffs at Block
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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 vs breakup-via-text-message.
* Giving people a chance to say goodbye.
Not gonna go into strategic analysis of this, or Jack's leadership style in general.
But realistically, you can't pen a better (or, well, less bad) layoff announcement.
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.
This seems … wrong.
> 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.
Sounds like a false dichotomy. The third option is that he could have kept them around. It would be financially feasible given that "our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving.".
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."
This reminds me of the meme of Margaret Thatcher: "And There is No Alternative" - a way to justify the policies she desired to implement and attempt to preempt any other view.
We're supposed to believe Jack is a victim of circumstance. He hired all those people, and now he has no choice but to fire them - he wasn't clairvoyant to the future when he hired all those people, or else he'd known he would have had to fire them. But now since he is clairvoyant to the future, he knows he must fire them.
We are all as childrens playthings right now.
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.
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
>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.
Pre pandemic Block had ~4000 employees
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
>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”.
> Owning the decision
Owning a decision means you have something at stake if things go wrong. What would happen to Jack if this decision turns out to be wrong? Any consequences?
Jack Dorsey has a habit of explosively increasing headcount. Twitter was so overweight that 80% were eliminated when Musk took over. Block's headcount grew from 3,900 to 12,500 in three years during Covid. Block's stock price has also tumbled from ~$275 to ~$54 since 2022. I think that the severance package is incredibly generous, and the willingness to communicate with those affected is admirable. But I also think that Dorsey is spinning a story to cover up for ZIRP-era mismanagement. AI provides the justification, with the hope that dumping 2x the work on the survivors won't crush them because AI tools will help. The bet may pay off, I'm just skeptical of the justification.
Couldn't even be bothered to type like an adult when he fired them.
I wrote this, currently at -2 points, a mere 24 hours ago, as a response to simonw unbounded and unwarranted optimism:
>>We're three years into the ChatGPT revolution now and so far the main observable impact on the craft that I care about is that I can build more ambitious things.
>I think you refuse to extrapolate the obvious consequences and have forgotten (if you ever knew) how it's like to be in trenches. You put on the horse blinders of 'easy to build' on the left and 'so much fun' on the right and happily trot on, while the wolves of white collar job automation are closing in for the middle class.
>You believe that we'll all become cyborg centaurs, while the managers believe we'll all become redundant. You think people will care about the sideslop everyone will build, not seeing that 'everyone will build' means 'no one will care'. Worse, means no one will buy (knowledge| skill|creation).
>Indeed we have not tipped over into the abyss, but we're teetering and the wind is picking up. It's not the end times, it's not AGI, it doesn't have to be AGI to wreck great damage on the economy, our craft and, ultimately, our way of life and our minds.
>And the wind is picking up, faster and faster.
> 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.
I don’t think we’ll ever return to the glory days (2007-2023). Software engineering in the next few years will become as cool as accounting or HR (as in not cool at all). Just a generic white collar profession like it was maybe in the 80s.
> 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
Being in a company that has done the gradual cuts, instead of one big cut, I unironically agree. I must have dodged like 15 staff reductions at this point. Company would be in a better state if the decision was taken to go for it big time. Still, it must be hard and shocking - but only once.
> 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.
Why are companies seeing it purely in terms of "we can work with a smaller team so we must" and not "my existing team can do so much more"?
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.
It's going to get really ugly, Jason Lemkin called this out as a possibility a few hours ago: https://youtu.be/mBE_9vGJBUM?si=WSyZXYgV48WfrNrv&t=2908
We're about to see a lot of public SAAS companies do the same and rebrand as "AI" first
If the cuts were not due to AI, what benefit does it provide to claim that it was?
To be clear I’m not saying it was AI. I just wonder, why come out and say it like that? What’s the incentive vs. other reasons?
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.
The framing of these layoffs as "AI-driven efficiency" is worth examining through the lens of Goodhart's Law. Once "AI productivity" becomes the stated metric, it stops being a useful measure.
Block's financials tell a more nuanced story: double-digit gross profit growth, strong forward guidance. This isn't a company in distress - it's a company that overhired during ZIRP and is now using the AI narrative as cover for normalization.
The real concern is the second-order effect: when profitable companies lay off 10%+ and frame it as AI, it creates a self-fulfilling prophecy where every company feels pressure to do the same regardless of whether AI actually changed their productivity. We're watching a coordination game play out in real time.
I had never heard of Block before, but I visited their website and downloaded one of their open-source projects, Goose (an OpenCode alternative). I ran a very simple prompt on one of the projects I’m working on to implement a small feature. It ended up going into what seemed like an infinite loop and consumed three-quarters of my monthly Poe subscription on a single prompt. I uninstalled it immediately.
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.
Took a quick look at their financials...
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...
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.
https://news.ycombinator.com/reply?id=47057908&goto=item%3Fi...
Called it. This will be for every single software company. Maybe all companies.
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?"
To those who stayed behind... won't you feel like you're potentially going to be next? With such a massive cut, I'd start making plans.
I have decided you will work twice as hard because I’m not as rich as Elon.
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.
Wishing the best for all those affected and excited to see many of you start new companies and continue to innovate.
We’re reaching “Don’t Look Up” levels of denial about the impact of AI on this site.
My recent experience with Cash App made it apparent that something is really going awry at Block: My decade-old account was suspended, despite no suspicious activity and being in my full legal name and address and connected to the same checking account I've always used. I appealed, but of course they upheld their opaque decision, which is now permanent. I'm not surprised they're struggling if this is how they treat users who have plenty of alternative options.
This feels similar to March 2020 when COVID was in Seattle. “It’s in the US but maybe it’s just a one-off.” We’ll see, I guess.
Block owns Square and Tidal. Let's show Jack how efficient we can be by canceling those sh...ervices. Claude can use them.
Does anyone know what teams are affected?
I wonder if this is the beginning of a new wave of layoffs across the industry like we had in 2022.
Everybody is on the edge, with the fear of a big layoff wave happening.
We see more and more people claiming they are so much more productive thanks to coding agents, big tech CEOs driving the use of AI like crazy, pundits anticipating rise of unemployment. Personally, I feel that productivity gains are overrated, but still, I'm pretty worried to lose my job in the near future. I'm saving aggressively.
> today we're making one of the hardest decisions in the history of our company:
> 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.
> i’m sorry to put you through this.
POV: Dude who has effortlessly fired people before deflects blame for over-hiring in the first place.
I swear people should start blacklisting CEOs and refuse to work under them if they're part of the blacklist.
This is just a piss poor excuse for bad management and short-sighted vision and no accountability.
Jack couldn't be bothered to use capital letters in his last layoff email either.
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?
Block really did not come down from it's COVID/ZIRP era high # of employees as much as many other companies, and it's COVID era headcount growth was extremely rapid by any standard.
In some ways this isn't daring, future looking leadership... it's much more lazy leadership that took a while to adjust to market demands.
> 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.
Making it seem like there's only going to be one mass layoff round. There will be another one, you can be certain.
All this is is evidence that Jack Dorsey had no idea what half the employees at Block were doing before he decided to do layoffs. May he know no peace, wherever he goes.
>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.
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”.
The future rocks
> first off, if you're one of the people affected, you'll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the U.S. you’ll receive similar support but exact details are going to vary based on local requirements). i want you to know that before anything else. everyone will be notified today, whether you're being asked to leave, entering consultation, or asked to stay.
Sounds like the perfect setup to start your own company!
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.