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.
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.
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.
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.
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".
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.
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.
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.
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."
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 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.
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 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.
https://xcancel.com/BullTheoryio/status/2027250361816486085
Just because G&A was up $68m doesn't mean it was all spent on that one party...
Edit: never mind, the report clarifies that without the party expense G&A would have been flat YoY.
... That's $7,000 per employee. I want to hear more about this party :D
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:
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.
Don't underestimate travel + hotels + airport transfers when you're paying corporate prices
A gift basket that includes fancy mixed nuts, some luxury soaps, a 96 core Epyc CPU, and a coupon book to local restaurants.
It was an in-person event, so flights, lodging, and food could have easily consumed a lot of that.
Running events is expensive when you have to fly your remote employees in and house them for multiple days.
I'm curious how much they lost in the bitcoin crash.
Lost $234 million on that according to https://archive.ph/09kZr (link goes to FT.com)
That’s the mark-to-market change, no?
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:
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.
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.
Food $200
Data $150
Rent $800
Party $68,000,000
Utility $150
someone who is good at the economy please help me budget this. my company is dying
Often embezzlement cases include crazy expenses.
Just put in my mind by the grift and corruption posts that are currently trending on HN front page 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.
haha my brain went like...
"ok.. but was it a party for all 9,000 people?"
"maybe they had great caterers"
... then I did the math. It's $7.5k per employee.
Clearly I'm just not creative enough to know how to waste money like an SV company.
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.
Well, the layoff post explicitly said that the company’s financial health was good.
Oh, well if they said so, there's no problem.
you don't need to get that fancy dijon mustard. Definitely can cut down on the food bill.
You can call it a 'party' if you want, but a company-wide in-person event is a) valuable, and b) expensive.
Calling an all-hands a party without any supporting evidence feels willfully negligent.
$68M/10000 employees = $6800/1 employee
A lot? Not a lot? Don’t know anymore.
At the cited $340000 salary, it amounts to around the same as one extra week of vacation for everyone.
Seems plausible. Travel (some international), hotels, taxis, venues, food, and entertainment. It adds up. Probably not a single day event.
If you account the employee wages into it, then it really adds up.
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.
$6,800 per person is absolutely absurd. If the event lasted an entire month, that's still $225 per person per day.
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.
For an event where many employees have to be flown in and stay at hotels in an expensive city? That's normal.
Hosting in-person events for 10,000 people is expensive even without having to transport and house anyone.
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
In what business is everyone in the company going business class?
Bloomberg Engineering
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
That actually sounds pretty reasonable.
Can it be that valuable when 40% of the participants aren't?
Maybe it served to find out which of them weren’t valuable. ;)
Maybe it’s just me, but I think being able to retain more employees is more valuable than flying the entire company for an in person event.
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".
Nothing inspires people to feel motivated and connected more than layoffs.
You have fewer people you worked with, a constant threat of unemployment and more work? Sign me up for that boss
/s
Yes - more at https://news.ycombinator.com/item?id=47185110
that's where the innovation happens
Block had more than 4000 employees? Rarely hear of it.
There is a big difference between a single party and a company wide offsite. Those can get quite expensive (airfare, hotels, food, etc)
Side note: I have no idea what Block does and why they need 10,000 employees anyway.
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.
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.
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.
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.
This is just Twitter ragebait.
I did the other math assuming it was 100% for the in-person event anyway.
Maybe that was the selection process, those that were less fun and didn’t engage into the AI water coolers are now packing their belongings
Travel and Entertainment
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.
Describing it as a “party” feels misleading. It was a company-wide offsite for an essentially fully remote organization.
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
How did they manage to spend 68M on it? Genuinely asking or is the number not accurate as it is clumped together with other stuff?
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.
At $6.8k/head, that's inefficient (a startup wouldn't spend like that) but not egregious if it was for e.g. a weeklong event or something.
Like any good company off-site. Strippers and steaks
And was the in person time more valuable than not having those people you met in your team moving forward?
I will say, to his credit, he has tried to make it clear the cuts weren't about money but do to tech and organizational shifts. https://x.com/jack/status/2027129697092731343?s=20
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.
What are you even talking about? Why does ANY business get rid of people? For funsies? X_X
Some people are negative value even if their salary was $0.
Sure. Hard to imagine 40% of your company is that.
If 40% of your company has ever been negative value than the problem starts at the top.
Were you laid off?
I’m going to take a wild guess that the answer is no
Ok, we've taken the party out of the title above. Thanks for the first-hand information.
What does the wording matter?
The crucial point is, was it an unnecessary expense?
last Block/Square party I went to had MC Hammer as a DJ.
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.
In the scope of Jack’s mismanagement, this seems minor. See: $29 billion for a BNPL company.
Wait till you find out the “party budget per employee” at the company you work for