Comment by daxfohl
13 hours 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.
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.
Having been through a couple of layoffs and merges, as I approach mid-century, the MBA powered managers are always to blame, because the stupid way to manage every year has to be x% exponential increase over the previous year, always forgetting that it is physically impossible when everyone goes for the same goal.
And then when targets aren't met, it is the employees that get shown the door while management gets their bonus.
The companies that are happy getting what they need to keep the lights on, seldom go through such layoff rounds.
Ah but the shareholders can sue the CEO, well this seems to be an US approach to how companies are run.
> the stupid way to manage every year has to be x% exponential increase over the previous year, always forgetting that it is physically impossible when everyone goes for the same goal.
That's why we have this corporate ritual, which we carry out each year, or even each quarter - a solemn ceremony, where we divide everyone into two groups: the cost centers and the profit centers.
Everyone works in harmony for the same organizational goals, but the people of cost centers also bear an additional, sacred duty, the highest of callings: to give up their employment and prospects for the future, to have their due credit be taken by the people of profit centers and poured onto the altar of the all-powerful Board. It's through this sacrifice of the many, that the symmetry is broken, allowing the year-by-year metrics to continue growing, against all wisdom and the laws of thermodynamics.
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> 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 valuations.
> the correction was largely complete over a year ago
We had tariffs and other disruptions since. So more correction is required.
I think it's a bit of both and perhaps 10% AI. Companies like Block are bloated for what they offer.
Regardless of the reasoning I think it is worth keeping in mind that the times when companies are letting talented experienced people go is also a great time to start the next new big thing. Talent that might have been unobtanium during a hiring frenzy could now be the building blocks of a new venture. A lot of these companies were started or really built themselves up during a tech slow down.
Good point. What's interesting is that startups with solid remote infrastructure now have access to talent pools that were harder to tap before. Engineers in places like LATAM or Eastern Europe who might have held tight to their FAANG remote gigs are now reconsidering options. The timezone alignment with US companies makes this particularly interesting for early-stage teams that need real-time collaboration but can't afford Bay Area salaries.
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 overhired in 2020–2022 and are normalizing. That’s plausible. But the financials don’t suggest a company scrambling to survive. Cutting that aggressively while guiding strong forward growth is unusual if the only goal were short-term margin repair.
So while “it’s AI” can sound like PR, the numbers at least make it credible that this is a structural efficiency move rather than a distress signal.
I don’t know… If the company is so healthy and has some nice financial buffer, I would expect the increased productivity due to AI to be used for more revenue generation. So either they don’t know how to translate all the quality hires they got into (enough) revenue, they can’t afford it, or maybe they they hired too fast to maintain quality :shrug: That’s my read at least
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it's all just saying stuff the shareholders want to hear. when the shareholders want to hear "we're staffing up aggressively" the companies hire. when the shareholders want to hear "we're moving workloads to AI" the companies fire.
it's not using AI as a scapegoat. they're doing this because they're quite literally being rewarded for it. they could care less what the employees who are getting fired think, as long as the investors are happy.
> save face from the absurd overhiring that they did in 2022 and 2023
I wonder how we all of sudden got so many candidates back from 2020 to 2022
Re: over hiring
I haven't worked for a large company for a long time but the last place I was my VP pushed us to hire 1000 people in one year. Turns out he was an acting VP, and needed to have that number for his formal promotion. Our division got penalised at the end of the year for falling short. By 30+ people.
I left before it collapsed and was sold for parts.
wow which company was this?
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>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
This keeps coming up, but the numbers at these companies don't add up. Any given FAANG you can think of (outside of maybe Apple) has had at least 5 rounds of layoffs over the years. But can you point to any of them having a lower headcount? I doubt all those engineers are being redirected towards AI development.
And despite that similar hearcount, it seems all have decrease initiatives over the years too. Meta stepped back from the verse it re-branded under, for instance.
I'm fairly convinced that what's happening is outsourcing initiatives disguides as layoffs for AI efficiencies.
> 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.
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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.
The Twitter layoffs being used as proof of _anything_ is misguided no matter what you're trying to say.
If success is losing half their revenue, reverting to revenue numbers from a decade ago, I gotta know what failure looks like. You might argue that the revenue losses aren't correlated to their headcount changes and probably make a good argument, but I mean... It's not a great one
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> After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false.
Twitter at the same time removed features to have fewer things to support. And didn't implement anything new (or really fix much) for ages. It's not the same service that was standing afterwards. And the "still standing" ignores the part where they started serving empty timelines, repeated messages from broken paging, broke 2fa for days, messed up whole continent access, etc. etc. They survived (and still had fewer problems than I expected), but it wasn't smooth at all - hardly a success too.
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This is the recommendation I have heard peers, both technical and managerial, echo for years in one form or another:
The above involves one thing people can possess which GenAI cannot; understanding stakeholder problems which need to be solved and then doing so.
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This is right on all counts and matches what I've seen and heard. And to all the sibling comments arguing about Elon's Twitter shenanigans being a bad move, it doesn't matter. I know because that's exactly what I said to a senior executive who deals with even more senior executives, and those were his exact words: "It doesn't matter." (A bit more in this thread: https://news.ycombinator.com/item?id=46750804)
I think their attitude could be summed up with this line by the Architect from the Matrix: "There are levels of survival we are prepared to accept."
I would only differ on one point: the situation was not this bad 2015-22. I would actually put the painful periods around the dot-com bust and the GFC. In fact, while not as great as the post-COVID heydays, things actually took off post 2010-ish. This timeline coincided with Meta starting a talent war at the same time that the Apple/Google no-poaching collusion lawsuit was filed.
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> It's harder to layoff someone you have had beers or coffee with
Interesting, in my experience this hasn't mattered at all. Generally those close enough to an employee to have had beers with them aren't the ones making any decisions related to layoffs, and may themselves be on the chopping block.
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I fully agree with everything you've said and think the Twitter one is a really good point that I haven't heard before.
That said, I think you've left out the impact of interest rates and the end of the Zero Interest Rate Policy (ZIRP) on this. So much of the "growth above all else", "revenue and user count matters more than profit" mindset companies had over the last 10 years was because ZIRP incentivizes them to invest in riskier assets. If safe investments pay 1% a year that's only a 10.4% return 10 years later. If safe investments pay 5% a year that's a 62.8% return 10 years later.
When rates are low, investors are more willing to focus on a company's potential because their money isn't making a lot while sitting in the bank. When rates went up (in addition to everything you said) investors all of a sudden wanted to see profit, not revenue or user base numbers which means a lot of these companies had to pivot their strategy fast. All the perks and crazy moonshot projects get cut and only things that are profitable or have a clear path to profitability are kept.
If you look back, that's exactly why we saw things like companies throwing crazy money at things like the metaverse and crypto and then practically over night pull the plug on them.
The charts below are the fed funds rate and the number of SWE jobs from Indeed, both from the fed and you can see how they align.
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
https://fred.stlouisfed.org/series/FEDFUNDS
> 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 do is move you and your family to the most expensive places in the world. But also live lean and save for a rainy day.
> 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.
Cultural differences. Things like "saving face" / not being able to admit a lack of knowledge in Asian cultures, Americans that need to be coddled (the higher up, the more dumbed down execs want information because they insist on micromanaging - they try to have their cake and eat it at the same time), Germans being blunt and direct to the point it offends Americans, Americans unable to comprehend Europe has labor regulations including on overtime and on letting go of staff... if you just say, you hire a bunch of bodies somewhere else and expect that to work out, you end up screwed - and many did end up screwed. In both ways, by the way.
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Sure it is not a smoking crater in the ground but outages are frequent, multi-media content loads about 50% of the time and search is basically non-functional at this point.
Let us never forget the "tweet reading limit" incident
Twitter is just a misinformation machine now. They got rid of anyone that made it a decent place. No more pesky moderation, sales and ad teams, etc. as long as it’s up and the sock puppets can foment dived, it’s serving its purpose.
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>After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false.
I agree with your sentiment, but this example is awful. Twitter cut engineering staffed, pissed off advertisers that caused an exodus, had its stock steadily declining under Musk, and eventually decided to go private again. Only to be "aquired" by Musk's AI wing. Maybe there was a large cut that can happen, but Musk explicitly mentions how his plan was always to "over fire" and rehire later. Clearly 60% was too far, and he overestimated his charisma to get people back.
It'd be a stretch to call Twitter a "well oiled machine", but clearly these moves proceeded to chug the gears down to a near halt. It hasn't seen a major collapse only because Musk is playing Hollywood accounting with all his businesses these days.
>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.
I think I'm just screwed in that case. At least for my industry. There's "some" games scene in SF, but not much more than some other hubs like LA, Austin, nor Seattle. That's not really where gaming startups pop up these days, either.
>We live in a competitive world and complaining on HN does nothing to help your material condition.
Waiting to hear on job apps gives plenty of time to vent, though.
I'm doing portfolio projects, but it feels like that only gets you so far unless you have a very specific domain in mine you want to showcase. Especially for someone who already has professional experience to point to.
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I don't know that I agree with most of what you wrote but others have already addressed that.
> 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.
I really fucking hate when people post this. It's one of those things that sounds substantive but it actually isn't. This is a social media forum, people express their opinions. Sometimes those opinions are negative about corporations or businesses. It's weird to tell people "STFU with your discussion on a discussion forum".
Twitter is a strange example given it has experienced a massive drop in valuation and ad revenue as well as struggled with user acquisition since Musk bought it. By all metrics it has declined in value except it where it serves as a powerful megaphone for the US right.
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You are VC. Your opinion literally doesn't matter, you're high on your own supply. I go to lunches and dinners with people like yourself frequently and every VC and finance guy wont stop talking about their idiotic delusions of having an AI workforce (slaves). You people yearn for the days of slavery again, but without humans.
Have fun during the neo-French Revolution Mr. VC, hope you made enough to fill your safe room with treats!
Never let a crisis go to waste, right?
Stoping trying to cope that AI/LLM augmented automation isn't to blame here. equities and profits are at all time highs, rates are still really low!! This has nothing to do with the cost of money.
It doesn't matter if AI is effective at reducing head count, it only matters that decision makers believe it will! If they go on twitter and see "SWE is dead" "4th industrial revolution is here" ect ect, they will eventually fall for the psyop and give half of their payroll to an AI company (or someone claiming they can do this)..
It will all backfire, probably, but in the meantime 400k SWEs have been laid off in the last 16 months while profits and equities are at all time highs. You can try to say its not AI, but I really think that's cope.
Go have lunch with a C-suite / decision maker in tech, they won't shut up about how all the jobs are going to be bots in the near future (and how rich it will make them). They are sincerly stupid but until then lives/families are going to get crushed and Dalio and Altman or similar people are going to continue to convince these people to give your salary to them..
Props to block for letting people keep their devices, and helping people out, its more than most companies but this absolutely has to do with AI BS. They've been itching to cut human labor out of the equation since slavery was crushed. They yearn for labor that doesn't demand a paycheck (slaves).
>Stoping trying to cope that AI/LLM augmented automation isn't to blame here.
It's not cope. The math just isn't mathing. the efficiencies advertiesed don't match the layoff proportions. The earning call employment counts don't match with the idea that they are "downsizing" as a company (meanwhile, what semblence of truth we have left in the job numbers DO suggest that we lost a lot of white collar jobs in 2024/5). The output error of deployed products don't match the sentiment that AI is leading to equal/higher quality software. The volume of litigation doesn't match this sentiment that "AI is here to stay".
This is less about whatever I personally think of AI (and especially its future) and more acknowledging that this is simply an irrational market. Yes, the market can indeed remain irrational longer than I can stay solvent. But that irrationality also has a time limit. I'm sure people in 1928 can point to how high its stocks were too.
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That might have been true three years ago. But not now
> 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.
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.
And before people like my barber would have had a square reader. With NFC in modern phones, they just use that
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.
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Did any of the blockchain initiatives ever go anywhere? I understood that's why they renamed the company to Block, but did that end up a similar rebrand to Facebook -> Meta?
They are heavily invested in Bitcoin and still offer and improve their Bitcoin services. It’s not really “blockchain.” They’re not a crypto company. They are ideologically dedicated to Bitcoin.
I don't think so. I know a couple people that worked in TBD (the bitcoin org) and everyone said it was directionless. Eventually the CTO ~abandoned that org and took on that Goose AI project.
The bought $170m of bitcoin at $50k a pop when their stock was $250, now it’s $67k and their stock is $67 (in after hours trading), so I guess it went pretty far in that respect.
The only thing it served was to distract Jack from building real products.
> 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.
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.
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.
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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.
Prompt companies are already evolving, establishing specific contexts to become business facilitators. That might be a "wrapper" project, but I bet there will be copyright litigation between these companies for "prompt piracy".
There are still (always?) business opportunites to leverage technology, in what we used to think was a virtuous loop of positive feedback.
If corporates are going to build AIs to attempt to sell things to people, there's going to be an opportunity for AIs that work for an individual, a "de-enshittifier" for example.
The "big model providers" right now aren't necessarily the actual ones that will persist. We're in another dotcom-type boom and when the tide goes out, some of them will have been swimming naked.
We've seen hackathons where attendees build a SaaS business in a weekend. More than just Startup Weekend validation and a shitty MVP. A pretty-much complete SaaS product. It's a step change.
But this means the market for SaaS products is going to get hit hugely. If you can vibecode up a specific service for your specific requirement in a few days, why bother buying a SaaS product?
And, of course, if you can build a me-too SaaS product that imitates a successful competitor over a weekend, and then price it at 10% of their price, that's going to hit business models.
I think the SaaS startup gravy train is definitely over and done.
Personally, my sense is that there's a lot left to do in batteries + motors + LLMs. The drones in Ukraine could be smarter. Robot companions that can hold a conversation. Voice interfaces for robots generally [0]. Unfortunately, the people making all the batteries, motors, and increasingly the LLMs, are in China. So those of us stuck with idiot governments protecting their fossil-fuel donors are going to miss out on it.
[0] the sketch of two scots in a voice-controlled lift still resonates, though. There's probably still work to do here.
The value in SaaS was never the code, it was the focus on the problem space, the execution, and the ops-included side.
AI makes code "free" as in "free puppy".
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The biggest limiting factor is user acquisition. Just because you can build a competitor in a weekend doesn't mean you can easily acquire a user base. it's dam hard to get users even if your product is twice as good and your giving it away for free!
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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.
Perhaps this is too US-centric, but as someone who used to work in health fintech, I strongly disagree.
The US healthcare system is well and truly f'd, but I think 98% of these issue are government and society policy issues. If anything, I see so many companies trying to take advantage of the complete dysfunction in the US healthcare system to be yet another middlemen siphoning money from systemwide inefficiencies.
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> 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.
This is the thing that keeps me up at night. Tech has allowed a very solid middle class lifestyle for a lot of people. I can't think of another good paying job where someone is self-taught, or went to a 12-month certificate program at their local community college and now has a very good career.
If those jobs disappear, or wage growth is non-existent, I don't know where the next generation will find those jobs.
Just one correction though: Your definition of middle class has to be super wide to call many tech jobs "solid middle class". It's not as if everyone ends up in the billionaire column, most definitions of middle class end with household income at $165k. Many in tech go over with one job. Once a family has two jobs and one is in tech, basically everyone counts as upper middle or above. With two tech jobs in a household, claiming middle class is often denying one's actual status.
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% :)
And if you kept everyone and used AI you could expand the business. Oh wait, they are out of ideas.
> 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.
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?
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)
In what sense did CashApp not pan out? $16b revenue. Too early to say whether Afterpay will work out but looking good so far
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.
> $16b revenue
I can make a lot of revenue selling $100 bills for $10. I'm not sure it'd "pan out".
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.
It also solves an exclusively American problem. In my country anyone can send money bank to bank, no need for a separate service.
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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.
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.
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".
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.
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.
Enjoy it while it lasts.
> 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!
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?
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/. 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.
> … 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 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.
I hear about CashApp but I don’t know anybody who uses it. What’s the selling point?
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-a...
Jack Dorsey likes to do side quests it seems, I see him in many things
> 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.
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.
>"(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.
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.