2026-02-26XThread

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This is the first AI cut. And it will send shockwaves. Remember: Jack is one of the greatest founders of all time. He created this platform that we’re all on, and has been early to many technological shifts. And Block was doing very well as a business. So, for him to cut 40% of headcount in this way is a signal to everyone in tech: get good now. Become indispensable. Work nights and weekends. Learn the AI tools and raise your game. Or you might not make the cut, as an employee or as a company. I know. That sucks. But capitalism is natural selection. The market is unforgiving, because you are the market. After all, it’s not like you’re buying some random gallon of milk from the store; you’re always buying the best product at the best price. So too for apps: your customers are always installing the best piece of code they can get. And because AI is going to create new winners, if you aren’t the best in your market, someone may become better with AI. Particularly with the new agentic workflows. To be clear: Block’s severance is generous by any measure. 20 weeks of pay, six months of health insurance and vested equity, all of that goes far beyond any typical package. Jack did his level best to cushion the disruption. The laid off are a temporarily unfortunate class, as opposed to a permanent underclass. But had he not leaned into the AI transition, he might have had to lay off more people, slowly, and over time, as faster competitors went after his market share. How would they do that? Sure, AI isn’t a panacea by any means, but the closer you are to software engineering the more aggressively you need to embrace agentic workflows. The AI companies are already doing that, and places like Stripe, Shopify, Coinbase, and now Block are pushing hard on this area. There will be overcorrection. But the fundamental technical innovation is real. And you need to either disrupt yourself or get disrupted. There are counterarguments worth engaging. One point (also by @MarceloLima) is that Block was overstaffed, like Twitter before the acquisition. Possibly true. But it’s also true that the new tools mean many orgs think they can do more with less. Some will run the experiment. @MarceloLima I flip back and forth on this. On the one hand, the short-term disruption is often overhyped. And the post 2022 tech hiring slowdown was due to rate hikes, not AI. On the other hand, truly end-to-end driverless cars actually are here and outcompeting human-driven cars. @MarceloLima This point by @FinnMurphy12 also has truth to it: even the possibility of mass layoffs due to AI may break what remains of the American social contract, which was already hanging by a thread. Recall that the US left hates tech for being white male capitalists. And much of the right simultaneously dislikes tech for being nonwhite immigrant globalists. But the wealth, productivity, and job-creating ability of tech has given them some partial shield… …till now. It’s quite possible that the AI disruption layered on top of everything else is the straw that breaks the camel’s back, where the bottom falls out of American support for Silicon Valley. With all the violent consequences that one might imagine. The problem is that the world won’t stand still. If America turns anti-tech, which I consider likely, it’ll be similar to how Europe just couldn’t really handle the disruption of the Industrial Revolution that it helped give birth to, and consequently lost their minds in the early 20th century. However, the younger and more supple American economy of the 1900s did manage to handle that disruption, with the Soviets as the arguable runner ups. They emerged dominant as a consequence. Today, early 21st century America is like early 20th century Europe, in that it’s given birth to an Information Revolution that it just might not be able to handle whilst remaining intact. The only two economies that can handle said disruption appear to be (a) China and (b) the Internet itself. (PS: it is also possible, by the way, that the AI disruption is partially overstated. But it’s really not completely imaginary…because the self-driving cars, kung fu robots, and intelligent agents actually do exist now.)

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lol Block/Square stock is up like 20% on laying off 40% of their headcount while growing and profitable. The Faustian bargain that big tech made with society was by creating a nuevoaristocracy of laptop-class landed gentry, their founders and shareholders were allowed to become wealthy beyond all imagination with little government intervention past slaps on the wrist. Google could cut 90% of the headcount and generate 90% of the revenue. But when this deal is broken, the displaced Baron’s will demand their own Magna Carta - tech leaders are too politically myopic to see this and so the more likely outcome is one of revolution. A rising of modern sans-culottes currently kept busy by the bread and circus’ of Doordash and TikTok but rallied to action by these displaced elites. AI may be the excuse but this has always been an option. Salesforce employs 75,000 people. Including Matthew McConnaughey on over $1,000,000.00 a year. Most of this headcount can hit the road - Covid proved many jobs are ritualistic button pressing exercises in a circular loop of keep up appearances financed by a need for elite docility. AI’s biggest disruption may be giving people the ‘excuse’ to finally break this pact. But I assure you the Maximilien Robespierre of today is not a puffed up perfumed Frenchmun. He’s a forty year old Stanford educated father of 4 who contributed to the Review about to lose his director role in Big Tech and enter the worst job market since the financial crisis. He will likely be equally as unforgiving if executives are not careful about how they carry themselves and their decisions in this coming shift.
FinnMurphy12 ↗

Any serious founder is spending every waking minute thinking about this and its ramifications It remains to be seen how this will impact the economy short term, but I don’t see it being good for the economy and for markets overall. I’m an irrational optimist, but short terms I think we see lots of pain in the tech sector.
torabyou ↗

@balajis Yea man, I won’t argue that AI isn’t disruptive, that’s nonsense. However, let’s not forget that Elon did the same thing when he took over twitter. The company has missed earnings estimates repeatedly and tbh this sounds more like a mgmt issue than a systemic issue.
themarketradar ↗

we're making @blocks smaller today. here's my note to the company. #### today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation. i'll be straight about what's happening, why, and what it means for everyone. 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. 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. 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, and to the trust that customers and shareholders place in our ability to lead. 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. a smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures. a decision at this scale carries risk. but so does standing still. we've done a full review to determine the roles and people we require to reliably grow the business from here, and we've pressure-tested those decisions from multiple angles. i accept that we may have gotten some of them wrong, and we've built in flexibility to account for that, and do the right thing for our customers. 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. to those of you leaving…i’m grateful for you, and i’m sorry to put you through this. you built what this company is today. that's a fact that i'll honor forever. this decision is not a reflection of what you contributed. you will be a great contributor to any organization going forward. to those staying…i made this decision, and i'll own it. what i'm asking of you is to build with me. we're going to build this company with intelligence at the core of everything we do. how we work, how we create, how we serve our customers. our customers will feel this shift too, and we're going to help them navigate it: 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. jack
jack ↗