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.

> 40%

More to your point, to get from 6,000 back up to 10,000 requires a 67% increase in productivity on the remaining 6,000!

> 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.

> 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.

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.

If its run anything like twitter then there are loads of teams running around trying random shit, along lots of duplication.

Its the same for meta, literally you could remove 2/3 of the head count and not have a problem with productivity (assuming you could not impact morale)

Seeing the >20% stock increase by just mentioning the "Replacing workers for AI", makes me wonder if there isn't a huge pressure from the shareholders to get on the trend no matter what. Short-term baby, rules the world.

But will be interesting how the company is in 2 years, if quality falls and innovation stalls, or if it is as you say that they hit their ceiling and is already in "maintenance mode".

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?

Yeah, the narratives diverge. He said "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." So, if these tools actually deliver this 90% productivity improvement? Will he let another 5k or then start cutting gradually over months?

We can all read stock market charts - the business isn't doing well.

You took the words out of my mouth. In a megacorp, AI multiplies into about 10% of my work and 10x’s it making me roughly 10% more efficient. When I use AI for side projects and don’t have to work with a bunch of stakeholders, dependency owners, and opinionated management, that 10x multiplies into my full effort and the project moves 10x faster.

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

I’m in big tech and use AI extensively, namely to do the same amount of output but in 1-2 hours a day. Been spending a ton of time on my side projects though.

I think your final sentence is more accurate than your churn argument. AI doesn't double output, but actually writing the code is only a small part of the job.

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?

> … 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.”

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

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

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.

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.