Block, parent company of Square, laid off nearly half of its workforce.
Corporate earnings calls can sound discordant in the face of historic layoffs, and Thursday’s Block call was one of the worst I’ve heard. Block CEO Jack Dorsey announced the company had laid off close to half of its employees, reducing headcount from 10,000 to under 6,000. The company’s stock price quickly jumped close to 25 percent as Block’s executives reported a year of growth. Dorsey assured investors that he had gotten ahead of a potential problem and some analysts congratulated company execs on the company’s recent performance.
Dorsey and other execs cited rapidly evolving and powerful artificial intelligence as the reason for the layoffs; he seemed particularly excited to push the suddenly much smaller company to move (and ship) faster. I can understand how AI might trim a company’s tech and engineering org. I understand less about how it’s going to replace the people working on Square’s restaurant products that lost their jobs this week. (From what I’ve heard so far, the layoffs cut across functions.)
During the call, Block’s leadership extolled Square’s progress inside restaurants, flagging a year-over-year increase in gross payment volume, or the total dollar amount of all payments processed by restaurants and other food-service vendors using Square’s point of sale. Block wants to “bring the playbook we’ve used over in food and beverage in the last 12 to 18 months into other verticals to drive further strength,” Amrita Ahuja, Block chief operating officer/chief financial officer, said.
Square has supported food and restaurant entrepreneurs since its earliest days as a payments company. It has long celebrated restaurant wins. Even in the face of a historic workforce reduction, good restaurant news made it into yesterday’s press release: Square’s sales team managed to sign “one of LA’s most celebrated restaurants, Anajak Thai… due to Square Handheld, our seller-first support team, our growing restaurant software suite, and strong integrations with partners like OpenTable.”
(No shade to Anajak and absolutely no shade to the restaurant team at Square, past and current. If your role was affected and you want to continue receiving this newsletter, please reach out for a year of Expedite on me. Just respond to this email.)