Block, formerly Square Inc., recently implemented layoffs affecting over 4,000 employees. In response to the workforce reduction, some remaining staff received retention packages, while former employees have utilized a private Slack channel, "Square Mafia," for networking and support. The company's CEO discussed AI efficiencies in relation to the layoffs, drawing reactions from former staff.
Block's Post-Layoff Landscape: Retention, Support, and AI Debates
Block initiated a significant restructuring, resulting in the layoff of more than 4,000 employees. Following this workforce reduction, the company offered retention packages to a segment of its remaining staff. These packages reportedly included substantial pay increases and bonuses aimed at retaining talent.
Naoko Takeda, a former data scientist at Block's Cash App, reported receiving a retention package that increased her pay by approximately 75% and included a one-time bonus, resulting in an estimated 90% overall compensation increase. Takeda resigned shortly after, citing personal feelings of "shame and dehumanization."
Other Block employees who remained after the layoffs also reported receiving retention bonuses, ranging from $60,000 to $80,000, distributed in quarterly installments. Block has not provided a comment to Business Insider regarding these retention packages or the recent layoffs.
The "Square Mafia": A Haven for Former Employees
The "Square Mafia" is a private Slack channel, established in February 2016, dedicated to individuals who have previously worked at Block. Serving as a crucial platform for networking, discussion, and mutual support, the channel currently boasts 3,807 members.
Following the recent layoffs, the channel experienced a rapid surge in membership, with at least 24 newly laid-off Block employees joining within an hour of the news breaking. Members of the "Square Mafia" extend various forms of support, including:
- Sharing LinkedIn profiles and professional connections.
- Offering job referrals and internal recommendations.
- Directing individuals to valuable networking resources.
- Discussing practical matters such as 401(k)s, healthcare, and H-1B visa concerns, with some members actively offering assistance and resources.
Membership in the "Square Mafia" is invite-only and adheres to three core rules: members must have left Block (formerly Square) at least once, must use their real names within the channel, and the group aims to maintain a positive and supportive environment.
Beyond layoff support, the community features dozens of channels mirroring those found in Block's official Slack, covering diverse interests like gaming, books, and memes, fostering a broader sense of community.
AI, Employee Reactions, and Industry Perspectives
Block CEO Jack Dorsey addressed AI efficiencies on an earnings call following the layoffs, stating that "a significantly smaller team using the tools we're building can do more and do it better."
However, Naoko Takeda challenged these statements, reporting "very limited gains in productivity" from AI within her experience at the company.
Some laid-off employees also expressed a sentiment that their embrace of AI tools did not ultimately prevent their termination.
Industry experts have offered varied perspectives on the practice of retention bonuses:
- Sarah Rodehorst, CEO of Onwards HR, suggested that such bonuses can alleviate concerns among remaining staff about job security and assist them in adapting to increased workloads.
- Pav Stojkovic, former chief people officer of The Athletic, indicated that significant staff reductions can lead to expanded profit margins, with short-term retention costs being minor compared to long-term savings, particularly when integrated with AI.
- Jennifer Schielke, CEO of Summit Group Solutions, highlighted potential downsides, including "survivor's guilt" and unease among remaining employees, which could negatively impact company culture and potentially lead to further resignations. Takeda explicitly mentioned experiencing "dread and survivor's guilt" after the layoffs.