Square’s layoffs, AI, and the future
I (stupidly?) hadn't considered this angle, but apparently Square parent Block has been thinking about it for years.
Plenty of tech watchers, including me, were surprised by Block’s huge layoff in late February, axing some 40 percent of its employees. Recent reports suggested that cuts were coming as employees were pushed to use more AI in their daily work. Still, it’s a jarring charge in scale and immediacy from a company that’s long positioned itself as an ally to restaurant entrepreneurs.
The layoffs hit Square’s restaurant team hard; head of food and beverage Ming-Tai Huh was among the 4,000 Block employees (and a significant portion of the team that worked on Square for restaurants) who were terminated recently, he confirmed. That, too, was a surprise to many, including me. After all, what’s more human than the hospitality business?
The answer: Not much! But, as this move reminds us, Block is not in the hospitality business, it’s a product-driven tech company. I used to call some restaurant tech businesses, including Square, “hospitable technology” companies. I think maybe… those days are over.
Hospitality is a human business. But going forward, that tech that supports it may not be. We live in the future, but where will all the people go? This is a particularly poignant question for hospitality tech.
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“Our team had an extreme focus on the operator/restaurant,” Huh wrote in a LinkedIn post last week announcing the news of his departure. “We worked not just long days, but nights and weekends, too — the times that really matter for the food industry. This allowed us to persuade so many restaurants, industry workers, and technology/go-to-market partners that Square was becoming a formidable food industry ally again.”
Square was becoming a formidable food industry ally again. In the last year, it introduced new, seriously upgraded hardware and made inroads inside the kind of hot, hip, high-profile restaurants that any restaurant technology company would be delighted to land as a client. (I see you, New York City darlings Stars and Borgo.) In addition to his previous day job — and, before that, spending the better part of a decade in the product org at Square nemesis Toast — Huh is a restaurant operator and Square client in Boston, giving him the kind of both-sides experience that carried clout and a lot of goodwill to his restaurant peers and partners.
After 13 years on this beat, I can confidently say that it is very obvious to an operator when a restaurant technology product is built by people who have never worked in restaurants. Still, Block’s leadership thinks AI can do it better.
At least, that’s what CEO Jack Dorsey told both Wall Street and what remains of the company in late February, an outwardly terrifying, doom-and-gloom development that sent shares of Block, Inc. up 24 percent before laid off workers could pack up their desks.