He phrases it as due to redundant overhead for cashapp and square, plus a move to smaller, flatter teams as a result of AI. Not saying he's going to be right just that they're profitable and I believe this isn't a money thing.
I don't know what event planning costs but running an event for ~10k people that includes flights, hotels, food, event space, etc. is expensive I guess.
It's on the high side, but...honestly not absurd? "Party" implies one night rager, but the source says "in-person company event." That seems more like a multi-day company onsite to me, and the total bill per person there probably includes travel, accommodations, food on top of any overall event costs.
Bringing a remote employee to SF just to work out of an office for a few days can easily cost a few grand.
airfare: $500, 5 nights (sun -> thur) in a hotel, fully costed: $250, per-diem of $100 6 days (fri is a travel day) is already $2350. If you rent a place that thousands can show up you'll be in for at least $5k.
I've been to all hands where it probably cost that much just in travel: business class LHR to SFO, hotel for a few nights, dinners, drinks, entertainment, venue, guest speakers, and on and on.
It doesn't seem excessive, the networking in these things is often really worth it
Not everyone, but often there are travel policies where any travel more than X hours long you can book business class without manager authorisation via concur and the like.
It's really worth it when you get off a 12 hour flight and have to go straight into hours of meetings without being a zombie
One could argue a smaller number of employees that are more motivated and feel connected to their coworkersis better than a more employees that are all isolated and "meh".
The $68M number comes from a statement that says their General and Administrative expenses were up year over year and the growth was primarily driven by an in-person company event.
The Tweet extrapolates to assume that the entire difference was due to the event and calls it a "party"
Even if we assume 100% of the increase was due to the event, that's about $6800 per employee, or about a week or two of pay for developers.
This includes flights, lodging, and food for remote employees. That adds up fast.
>"General and administrative expenses were up 14% year over year on a GAAP basis, driven in part by an in-person company event. Excluding this expense, general and administrative expenses remained roughly flat year over year in the third quarter."
laying of 50% of your workforce is the obvious solution. next year the party will only be $34 million. repeat that 4 more times and you get down to just over $4 million.
Kinda how it worked for my last full time job. Full on all-hands which flew all the remote workers in, and my lead made 2 guesses: "Either we've been acquired or the IP has been cancelled". I guess the sad part is that an acquisition wouldn't guarantee I wouldn't be laid off anyway.
Since they bought bitcoin while their stock was worth ~2-4x what it is today, I’d say the “arbitrage paper certificates for digital 1s and 0s” play worked out pretty well overall.
Bought btc for $10k and $51k (about 60/40 respectively) and it’s trading for $65k 5 years later. Dunno what other buying/selling they may have done.
From Wikipedia:
> In October 2020, Square put approximately 1% of their total assets ($50 million) in Bitcoin (4,709 bitcoins), citing Bitcoin's "potential to be a more ubiquitous currency in the future" as their main reasoning.[52] The company purchased approximately 3,318 bitcoins in February 2021 for a cost of around $170 million, bringing Square's total holdings to around 8,027 bitcoins (equivalent to around US$500 million in 2021, around US$481 million as of July 2024).[53]
You have to compare it to what else they could have done with the money, such as investing in their own growth, or even giving it back to shareholders if they had no good ideas what to do with the money.
I did! If they invested it in themselves it would have been a 50-75% loss, same with doing a buyback (return the cash to stockholders) at a high stock price.
Dunno what better proxy I could
use for how it would have went other than their actual stock price. Unless we are to think their next best idea that they didn’t invest in would have done better than all the other things they did invest in. But that’s very speculative.
Instead they got a blended 300% gain on btc.
Should have sold the entire company for cash and bought bitcoin at the timelines they did.
Maybe if they'd invested in themselves they would have been able to expand (eg. they could have hired more sales people or spent more on advertising).
If they truly were unable to find a reliable investment then they should have given the money back to shareholders instead of speculating on a non-productive non-asset with awful negative externalities.
I sincerely hope the event branding played on calling it a "Block Party".
But anyway, as others have said, the tweet seems outrageous at first, but at $6800 per employee for a multi-day offsite, with hotels, travel, etc included, it doesn't seem excessive. I'm sure their salary for that month was significantly higher.
I think this is missing the forest for the trees. With 4000 fewer employees, they could have a $136M meetup party and still be ahead by hundreds of millions, assuming they can sustain or increase revenue.
That's the big bet software companies are making right now.
I do not know about here, but back home in India, 68 M would be so juicy for someone in the organizing chain to not take a cut. People get fired all the time, but sometimes the gravy train can run for years before getting caught.
No first hand experience ... just anecdotes and some news reports.
it included flights, hotels, food and travel expenses for 9000 for multiple days, as well as the "party".
US-based travel for 1 person for 5 days is easily 4K, on top of that some people were probably international so it would be higher, and on top of that there are the "party" expenses like venue and catering which probably wasn't that significant.
I got curious as well, because the craziest party poor me can imagine would clock in at maybe half that, including travel. All I could find:
> The three-day festival in downtown Oakland featured performances by Jay-Z, Anderson .Paak, T-Pain, and Soulja Boy, and brought 8,000 employees from around the globe.
So that'd make it 8.5k per person. Building stages, paying permits, hiring acts like these, I bet that's where it mostly went.
He said very specifically that the layoffs weren’t for financial reasons, and they are publicly traded company so you can just look at the reports. Anyone who thinks this wasn’t because of AI has a level of optimism I’ll never achieve.
One key piece of financial information in those reports is that that their revenue growth fell off a cliff when ZIRP ended (months before ChatGPT came out) and never recovered to even pre-Covid levels. There's no indication that their core business is unhealthy, and I'm not claiming to rule out that AI is related, but it makes sense that a company transitioning to "maintenance mode" might find itself wanting to be a lot smaller.
Cynicism can be optimism when the prevailing narrative is doom and gloom.
How is the competing narrative of cutting teams that were working on non-core or experimental projects falsified by any of this? Why wouldn't they put a brave face on that and chalk it up to AI? You can see how the stock market has rewarded it.
Was it necessary? Probably not. But I found the in-person time valuable, especially with teammates I’d never met face to face.
Source: I was there