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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

by daxfohl 7mo ago

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.

n2d4 7mo ago
In what sense did CashApp not pan out? $16b revenue. Too early to say whether Afterpay will work out but looking good so far
- ceejayoz 7mo ago
  > $16b revenue I can make a lot of revenue selling $100 bills for $10. I'm not sure it'd "pan out".
- daxfohl 7mo ago
  Updated to two tricks. And you could argue three if you call banking its own trick. Afterpay was an acquisition (and much smaller) so IDK if that counts. 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.
  - rswail 7mo ago
    Afterpay (and the other Buy Now Pay Later competitors like Klarna) are potential financial arrangement facilitators for their customers. Sure the BNPL model uses effectively invoice factoring with high interest penalties but they do have a financial relationship with both vendors and buyers. There's a lot to leverage there. It's Paypal with lending attached.
- toomuchtodo 7mo ago
  CashApp was launched in 2013, long before Zelle and other instant payment rails arrived, which closed wallet providers solved for (Venmo too, owned by...Paypal). There is little growth to be had when these customers can get free deposit accounts with access to Zelle or FedNow to move value for free instantly. It's success to be sure to accumulate the cashflow from the customer base built, but it isn't lasting.
  - tempest_ 7mo ago
    It also solves an exclusively American problem. In my country anyone can send money bank to bank, no need for a separate service.
    - toomuchtodo 7mo ago
      Absolutely, most of this is private corporate duct tape over a lack of Pix (Brazil), UPI (India), Instant SEPA (Europe), etc [1]. “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” [2] In a US financial services market, Venmo and CashApp are unnecessary assuming you procure a deposit account from a bank or credit union with instant payment rails access [3] [4]. Even Schwab has access to Zelle, for example. You need not extend credit and have credit risk exposure for paper checks anymore as well as an issuer of a deposit account. [1] https://en.wikipedia.org/wiki/Instant_payment https://en.wikipedia.org/wiki/Instant_payment [2] (widely attributed to Winston Churchill) [3] https://enroll.zellepay.com/ https://enroll.zellepay.com/ [4] https://www.frbservices.org/financial-services/fednow/organizations https://www.frbservices.org/financial-services/fednow/organi...
      - kevin_thibedeau 7mo ago
        > Even Schwab has access to Zelle Schwab's accounts are backed by Chase. Zelle comes along for the ride.
      - linkregister 7mo ago
        Zelle has a transfer limit of $1000 per day and has a bad user interface.
vineyardmike 7mo ago
> 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.
- mathattack 7mo ago
  40% actually seems reasonable for a flip into maintenance mode. That’s what PE firms do when then buy cash cow businesses. Dramatically cut engineering on new functionality, cut back on sales and marketing, remove all redundancy in operations. Anyone who has counted on a vendor that went private or was bought by a rollup firm has felt this pain. Better to do it all at once than repeated declines.
  - hellojesus 7mo ago
    I first entered the workforce at IBM and several months later they did layoffs (resource action). Every six months after that for my 6ish year tenure there were more resource actions. To this day I walk into the office each morning thinking today may be the day I get laid off. My wife doesn't think it's a healthy mentality, but I'm not sure I know another path of life. This is to say at least it's done in one fell swoop. Repeated layoffs are certainly demoralizing.
    - MattGaiser 7mo ago
      > To this day I walk into the office each morning thinking today may be the day I get laid off. My wife doesn't think it's a healthy mentality, but I'm not sure I know another path of life. Why? It lets you plan your actions accordingly.
rco8786 7mo ago
> 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.
- paxys 7mo ago
  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.
  - raw_anon_1111 7mo ago
    And before people like my barber would have had a square reader. With NFC in modern phones, they just use that
  - mattmaroon 7mo ago
    It’s not extra and their hardware is still far better than the competition. Square is still awesome in the small business PoS space. Their lead has not shrunk.
    - Marsymars 7mo ago
jagged-chisel 7mo ago
> … 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.”
- compiler-guy 7mo ago
  I think it is a question of who is getting the benefit of these efficiencies. If it is the worker—ie they are doing the same amount of work in less time but not making that extra time available to the company—then from the company’s perspective they aren’t being more efficient. Or at least the additional efficiency doesn’t affect it.
tombert 7mo ago
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.
- alephnerd 7mo ago
  > 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 layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false. The second nail was the change in operational metrics. Before 2023, ARR growth was a good enough metric to target. After 2023, FCF positivity became the name of the game. Especially because us investors are demanding this because most funds are reaching the 10 year mark where we need to make our LPs whole, so a path to exit (be it IPO, M&A, or a continuation fund) needs to be communicated. And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery. Add to that some very, very, very bad hires (most bootcamp grads just can't cut it) at absurdly high salaries and that's why you're seeing the culling that is occurring today. That said, AI tools are powerful, and if you are working on rightsizing an organization, using Claude or Enterprise GPT in workflows helps one person do multiple jobs at once. We now expect PMs to also work as junior program managers, designers, product marketers, customer success managers, and sales engineers and we now expect SWEs to also work as junior program managers, designers, docs writers, and architects. Now I can lay off 10-20% of my GTM, Designers, SWEs, Program Managers, and Docs Writers and still get good enough output. --- IMO, if you want to survive in the tech industry in this world, doing the following will probably help maintain your longevity: 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. 2. Start coming into the office 2-3 days a week. It's harder to layoff someone you have had beers or coffee with. Worst case, they can refer you to their friends companies if you get laid off 3. Upskill technically. Learn the fundamentals of AI/ML and MLOPs. Agents are basically a semi-nondeterministic SaaS. Understanding how AI/ML works and understanding their benefits and pitfalls make you a much more valuable hire. 4. Upskill professionally. We're not hiring code monkeys for $200K-400K TC. We want Engineers who can communicate business problems into technical requirements. This means also understanding the industry your company is in, how to manage up to leadership, and what are the revenue drivers and cost centers of your employer. Learn how to make a business case for technical issues. If you cannot communicate why refactoring your codebase from Python to Golang would positively impact topline metrics, no one will prioritize it. 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. The reality is the current set of layoffs and work stresses were the norm in the tech industry until 2015-22. We live in a competitive world and complaining on HN does nothing to help your material condition.
softwaredoug 7mo ago
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?
tootie 7mo ago
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.
hn_throwaway_99 7mo ago
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.
- nradov 7mo ago
  There's still enormous potential for technology solutions in the healthcare space. The population in every developed country is getting older and sicker. AI can help a little bit with building those solutions but there are no magic bullets: we still need lots of people grinding away on hard problems.
  - hn_throwaway_99 7mo ago
deleted 7mo ago
[deleted]
anukin 7mo ago
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?
- daxfohl 7mo ago
  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/ 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.
brightball 7mo ago
I hear about CashApp but I don’t know anybody who uses it. What’s the selling point?
- hn_throwaway_99 7mo ago
  It's of course an exaggeration to say white people use Venmo and black people use CashApp, but it's not too far off the mark: https://www.pewresearch.org/short-reads/2022/09/08/payment-apps-like-venmo-and-cash-app-bring-convenience-and-security-concerns-to-some-users/ https://www.pewresearch.org/short-reads/2022/09/08/payment-a...
- rswail 7mo ago
  It provides a facility that FedNow and Zelle will replace. It's a US specific solution for instant settlement payment rails that other nations have had for a while. FedNow is the underlying infra, Zelle will end up being the consumer brand wrapper around it. In Australia, the equivalent is the New Payments Platform (NPP) and the consumer "brand" is PayID. I can associate an email address or a mobile number to a bank account. Anyone can transfer money from their bank account to mine using that ID, without knowing what account or what bank. There are other things being built on top, like "PayTo" where businesses can set up the equivalent of direct debit agreements, like utilities billing, but the consumer can also control it without having to go through the bank paperwork.
kelvinjps10 7mo ago
Jack Dorsey likes to do side quests it seems, I see him in many things
hedora 7mo ago
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.
morelandjs 7mo ago
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.
- SecretDreams 7mo ago
  Yep. I find it helps best when I'm off script/going rogue doing something that I think will help, rather than working with 10 other people all with different opinions and knowledge that just absolutely bogs something down.
  - rswail 7mo ago
    What makes you think corporate hierarchies and processes won't infect their use of AI so that you won't be able to "go rogue" and you'll be held up by AI reviews, not humans. Oh and the opposite when you are one of the 10 "other" people on someone else's project.
    - SecretDreams 7mo ago
      Agree
leoqa 7mo ago
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.
- rlt 7mo ago
  Enjoy it while it lasts.
- orphea 7mo ago
  Yep. I don't understand "Look at me! With AI I can do 10x work now". Like congrats, your prize is 10x work and new baseline expectations.
  - leoqa 7mo ago
    The higher velocity ends up bottlenecking on actual product decisions, deployments, testing etc. Before AI was generally blocked on the design approval, PR cycles, flaking tests etc. AI just helps me endure the pain of legacy code easier. In my own personal projects I’m flying with AI. I know what I’m doing, I know how I would implement the code. Now I can just save the labor of typing the boilerplate.
Xeronate 7mo ago
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.
pllbnk 7mo ago
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.
Flatterer3544 7mo ago
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".
KaiserPro 7mo ago
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)
nimonian 7mo ago
> 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!
egorfine 7mo ago
> how much the AI aspect is true You should try to seriously vibe code and see for yourself. It really helped me overcome my anxiety that programmers will be out of job soon. Ah, and yes, you absolutely should repeat that exercise with every new model to reinforce your confidence.
FpUser 7mo ago
>"(40%? come on)" I think this is entirely possible. I have cases right in front of me when one developer can do a job of 2 and still have some time to spare. The developers in question are very senior, architect type.
Snuggly73 7mo ago
Just to nitpick the math. If you are going to fire 50% of the company, the AI tools should actually make the remaining people 100% more efficient, not 50% :)
- sublimefire 7mo ago
  And if you kept everyone and used AI you could expand the business. Oh wait, they are out of ideas.
themafia 7mo ago
> towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces. that's what i'm focused on now. expect a note from me tomorrow. These people are deranged or are flat out liars. Customers building "features directly." Yet somehow still trapped inside their walled garden? I wonder why they imagine they can cannibalize their legs but pretend they can save their arms in the long run. They either believe they can have it both ways or they're simply milking a hot market right now and know one shoe or the other has to drop.
sethev 7mo ago
Folks at Jack's level are just as susceptible to flawed reasoning and trend following as anyone else. Sometimes it feels like more so, possibly because they have so much buffer to absorb the consequences of bad ideas (see how Twitter ended up). A person living paycheck to paycheck has less leeway to veer too far away from reality. All of this to say. I suspect a lot 10k person companies made up of white collar workers could significantly cut their staff and still survive. By the time you get to that size, there's a large middle management that is constantly looking for reasons to increase their 30 person org to 40, and who will be overbooked whether they have 20 people or 100.

by daxfohl 7mo ago

n2d4 7mo ago

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

ceejayoz 7mo ago
> $16b revenue I can make a lot of revenue selling $100 bills for $10. I'm not sure it'd "pan out".
daxfohl 7mo ago
Updated to two tricks. And you could argue three if you call banking its own trick. Afterpay was an acquisition (and much smaller) so IDK if that counts. 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.
- rswail 7mo ago
  Afterpay (and the other Buy Now Pay Later competitors like Klarna) are potential financial arrangement facilitators for their customers. Sure the BNPL model uses effectively invoice factoring with high interest penalties but they do have a financial relationship with both vendors and buyers. There's a lot to leverage there. It's Paypal with lending attached.
toomuchtodo 7mo ago
CashApp was launched in 2013, long before Zelle and other instant payment rails arrived, which closed wallet providers solved for (Venmo too, owned by...Paypal). There is little growth to be had when these customers can get free deposit accounts with access to Zelle or FedNow to move value for free instantly. It's success to be sure to accumulate the cashflow from the customer base built, but it isn't lasting.
- tempest_ 7mo ago
  It also solves an exclusively American problem. In my country anyone can send money bank to bank, no need for a separate service.
  - toomuchtodo 7mo ago
    Absolutely, most of this is private corporate duct tape over a lack of Pix (Brazil), UPI (India), Instant SEPA (Europe), etc [1]. “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” [2] In a US financial services market, Venmo and CashApp are unnecessary assuming you procure a deposit account from a bank or credit union with instant payment rails access [3] [4]. Even Schwab has access to Zelle, for example. You need not extend credit and have credit risk exposure for paper checks anymore as well as an issuer of a deposit account. [1] https://en.wikipedia.org/wiki/Instant_payment https://en.wikipedia.org/wiki/Instant_payment [2] (widely attributed to Winston Churchill) [3] https://enroll.zellepay.com/ https://enroll.zellepay.com/ [4] https://www.frbservices.org/financial-services/fednow/organizations https://www.frbservices.org/financial-services/fednow/organi...
    - kevin_thibedeau 7mo ago
      > Even Schwab has access to Zelle Schwab's accounts are backed by Chase. Zelle comes along for the ride.
    - linkregister 7mo ago
      Zelle has a transfer limit of $1000 per day and has a bad user interface.

vineyardmike 7mo ago

> 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.

mathattack 7mo ago
40% actually seems reasonable for a flip into maintenance mode. That’s what PE firms do when then buy cash cow businesses. Dramatically cut engineering on new functionality, cut back on sales and marketing, remove all redundancy in operations. Anyone who has counted on a vendor that went private or was bought by a rollup firm has felt this pain. Better to do it all at once than repeated declines.
- hellojesus 7mo ago
  I first entered the workforce at IBM and several months later they did layoffs (resource action). Every six months after that for my 6ish year tenure there were more resource actions. To this day I walk into the office each morning thinking today may be the day I get laid off. My wife doesn't think it's a healthy mentality, but I'm not sure I know another path of life. This is to say at least it's done in one fell swoop. Repeated layoffs are certainly demoralizing.
  - MattGaiser 7mo ago
    > To this day I walk into the office each morning thinking today may be the day I get laid off. My wife doesn't think it's a healthy mentality, but I'm not sure I know another path of life. Why? It lets you plan your actions accordingly.

rco8786 7mo ago

> 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.

paxys 7mo ago
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.
- raw_anon_1111 7mo ago
  And before people like my barber would have had a square reader. With NFC in modern phones, they just use that
- mattmaroon 7mo ago
  It’s not extra and their hardware is still far better than the competition. Square is still awesome in the small business PoS space. Their lead has not shrunk.
  - Marsymars 7mo ago

jagged-chisel 7mo ago

> … 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.”

compiler-guy 7mo ago
I think it is a question of who is getting the benefit of these efficiencies. If it is the worker—ie they are doing the same amount of work in less time but not making that extra time available to the company—then from the company’s perspective they aren’t being more efficient. Or at least the additional efficiency doesn’t affect it.

tombert 7mo ago

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.

alephnerd 7mo ago
> 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 layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false. The second nail was the change in operational metrics. Before 2023, ARR growth was a good enough metric to target. After 2023, FCF positivity became the name of the game. Especially because us investors are demanding this because most funds are reaching the 10 year mark where we need to make our LPs whole, so a path to exit (be it IPO, M&A, or a continuation fund) needs to be communicated. And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery. Add to that some very, very, very bad hires (most bootcamp grads just can't cut it) at absurdly high salaries and that's why you're seeing the culling that is occurring today. That said, AI tools are powerful, and if you are working on rightsizing an organization, using Claude or Enterprise GPT in workflows helps one person do multiple jobs at once. We now expect PMs to also work as junior program managers, designers, product marketers, customer success managers, and sales engineers and we now expect SWEs to also work as junior program managers, designers, docs writers, and architects. Now I can lay off 10-20% of my GTM, Designers, SWEs, Program Managers, and Docs Writers and still get good enough output. --- IMO, if you want to survive in the tech industry in this world, doing the following will probably help maintain your longevity: 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. 2. Start coming into the office 2-3 days a week. It's harder to layoff someone you have had beers or coffee with. Worst case, they can refer you to their friends companies if you get laid off 3. Upskill technically. Learn the fundamentals of AI/ML and MLOPs. Agents are basically a semi-nondeterministic SaaS. Understanding how AI/ML works and understanding their benefits and pitfalls make you a much more valuable hire. 4. Upskill professionally. We're not hiring code monkeys for $200K-400K TC. We want Engineers who can communicate business problems into technical requirements. This means also understanding the industry your company is in, how to manage up to leadership, and what are the revenue drivers and cost centers of your employer. Learn how to make a business case for technical issues. If you cannot communicate why refactoring your codebase from Python to Golang would positively impact topline metrics, no one will prioritize it. 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. The reality is the current set of layoffs and work stresses were the norm in the tech industry until 2015-22. We live in a competitive world and complaining on HN does nothing to help your material condition.

softwaredoug 7mo ago

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?

tootie 7mo ago

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.

hn_throwaway_99 7mo ago

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.

nradov 7mo ago
There's still enormous potential for technology solutions in the healthcare space. The population in every developed country is getting older and sicker. AI can help a little bit with building those solutions but there are no magic bullets: we still need lots of people grinding away on hard problems.
- hn_throwaway_99 7mo ago

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anukin 7mo ago

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?

daxfohl 7mo ago
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/ 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.

brightball 7mo ago

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

hn_throwaway_99 7mo ago
It's of course an exaggeration to say white people use Venmo and black people use CashApp, but it's not too far off the mark: https://www.pewresearch.org/short-reads/2022/09/08/payment-apps-like-venmo-and-cash-app-bring-convenience-and-security-concerns-to-some-users/ https://www.pewresearch.org/short-reads/2022/09/08/payment-a...
rswail 7mo ago
It provides a facility that FedNow and Zelle will replace. It's a US specific solution for instant settlement payment rails that other nations have had for a while. FedNow is the underlying infra, Zelle will end up being the consumer brand wrapper around it. In Australia, the equivalent is the New Payments Platform (NPP) and the consumer "brand" is PayID. I can associate an email address or a mobile number to a bank account. Anyone can transfer money from their bank account to mine using that ID, without knowing what account or what bank. There are other things being built on top, like "PayTo" where businesses can set up the equivalent of direct debit agreements, like utilities billing, but the consumer can also control it without having to go through the bank paperwork.

kelvinjps10 7mo ago

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

hedora 7mo ago

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.

morelandjs 7mo ago

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.

SecretDreams 7mo ago
Yep. I find it helps best when I'm off script/going rogue doing something that I think will help, rather than working with 10 other people all with different opinions and knowledge that just absolutely bogs something down.
- rswail 7mo ago
  What makes you think corporate hierarchies and processes won't infect their use of AI so that you won't be able to "go rogue" and you'll be held up by AI reviews, not humans. Oh and the opposite when you are one of the 10 "other" people on someone else's project.
  - SecretDreams 7mo ago
    Agree

leoqa 7mo ago

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.

rlt 7mo ago
Enjoy it while it lasts.
orphea 7mo ago
Yep. I don't understand "Look at me! With AI I can do 10x work now". Like congrats, your prize is 10x work and new baseline expectations.
- leoqa 7mo ago
  The higher velocity ends up bottlenecking on actual product decisions, deployments, testing etc. Before AI was generally blocked on the design approval, PR cycles, flaking tests etc. AI just helps me endure the pain of legacy code easier. In my own personal projects I’m flying with AI. I know what I’m doing, I know how I would implement the code. Now I can just save the labor of typing the boilerplate.

Xeronate 7mo ago

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.

pllbnk 7mo ago

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.

Flatterer3544 7mo ago

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".

KaiserPro 7mo ago

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)

nimonian 7mo ago

> 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!

egorfine 7mo ago

> how much the AI aspect is true You should try to seriously vibe code and see for yourself. It really helped me overcome my anxiety that programmers will be out of job soon. Ah, and yes, you absolutely should repeat that exercise with every new model to reinforce your confidence.

FpUser 7mo ago

>"(40%? come on)" I think this is entirely possible. I have cases right in front of me when one developer can do a job of 2 and still have some time to spare. The developers in question are very senior, architect type.

Snuggly73 7mo ago

Just to nitpick the math. If you are going to fire 50% of the company, the AI tools should actually make the remaining people 100% more efficient, not 50% :)

sublimefire 7mo ago
And if you kept everyone and used AI you could expand the business. Oh wait, they are out of ideas.

themafia 7mo ago

> towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces. that's what i'm focused on now. expect a note from me tomorrow. These people are deranged or are flat out liars. Customers building "features directly." Yet somehow still trapped inside their walled garden? I wonder why they imagine they can cannibalize their legs but pretend they can save their arms in the long run. They either believe they can have it both ways or they're simply milking a hot market right now and know one shoe or the other has to drop.

sethev 7mo ago

Folks at Jack's level are just as susceptible to flawed reasoning and trend following as anyone else. Sometimes it feels like more so, possibly because they have so much buffer to absorb the consequences of bad ideas (see how Twitter ended up). A person living paycheck to paycheck has less leeway to veer too far away from reality. All of this to say. I suspect a lot 10k person companies made up of white collar workers could significantly cut their staff and still survive. By the time you get to that size, there's a large middle management that is constantly looking for reasons to increase their 30 person org to 40, and who will be overbooked whether they have 20 people or 100.