Block set its workforce size by rebuilding the company on paper

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 31:00

   this was a really bold move you laid off 40 of your employees just like for ceos listening what was that debate inside like how big it should it be how bold should it be you know ruport's got this good line if you're gonna we're gonna eat a shit sandwich don't nibble and you seem like you took a big bite what was that debate behind the scenes and then rulof like how did he pitch it to you guys and what was the board's reaction just like behind the scenes on that yeah so um it was something you know december of last year is when the is the when the models really got a uh like noticeable upgrade from being able to be really good at building prototypes and Reedfield efforts to like understanding like large code bases and legacy code bases like our own. Um, there was, you know, hallucination wasn't much of a topic in terms of like the coding ability and

2. 32:02

   the tool harnesses, we became suddenly very mature, like just in that month. And, um, it just like every, everyone went home for the holidays and everyone played with these tools and And they were surprised at how capable they were and what they could do with them. And, you know, we came back and the conversation was like just going around the table. Would you build the company this way? if you had these tools today, like what would the company look like?

3. 32:34

   And everyone around the table and my team just said like, it would not look like this. It would not be this size. It would not be structured this way. And we've been making like changes on the, on the edge, like, you know, going from a GM structure to a functional structure to reduce, like putting a cap on our layers to four, me plus four, and all these like small things. um but if we were to really reboot and rebuild the company like would we end up where we where we look today and the answer was uniformly no no and and then we just did this exercise of like okay so what is the minimal number of people that we would need to keep the service up 100 and then next what is the minimal number of people that we would need to fully be in compliance with our regulators.

4. 33:27

   We're a highly regulated business, so that one's extremely important to us. And legal, obviously. And then third, what is the minimal set of folks that we need in order to grow to fulfill our commitments we've made to the street, but also rebuild a company as an intelligence? And that's roughly the number that we got to and we built in some buffer in case we made mistakes which we did and you know hard not to especially operating the way we have like I think going forward it'll be much easier because more of the company will be legible and all of our actions will be a lot more legible so I'd have a lot more confidence going forward than not but it was it was that and and there was a span of you know expiration to execution and you know under under three weeks um and i think generally i wanted to make sure that we if we knew that this was what our company was going to be in

5. 34:28

   the future i didn't want to have to do it with our backs against the wall we're a public company and there's various challenges there and other companies will will probably get to this realization at some point i don't want to react to that i want to i want to um i want to be ahead of it because then we can do it with a lot more integrity we can do it with a lot more generosity for the people that we're asking to to leave um and even for the people that we're asking to stay and we're not just reacting into, um, something mediocre, we're, we're, you know, uh, acting towards excellence. And, and like, that's just the tone that we wanted to set. So, um, you know, every, every day it was just like constantly checking, like, are we doing the right thing?

6. 35:17

   Is this the right set of folks? Like, um, like, what are we not thinking about? What are we not talking about and we you know we kept the group very very tight um and had a conversation with with the board um which was uh my perspective very open to it and and actually more more than open more like yes we agree like we we should we should do this but i'll i'll let roloff speak to that it was a very quick process okay i think part of what helps is that jack had written us a very detailed note laying out the logic it's principled it's not as Jack was saying it's not reactionary it's very well laid out very logical it was clear that the company and the management team was interested in a conversation about how to make this work as opposed to being dogmatic and saying have it all figured out so even in the course of those three weeks elements of this

7. 36:15

   evolved and it evolved in light of feedback from management team members and board members You know, some of where we started in the first of those three weeks is different from where we ultimately landed by the time the announcement took place. And I also think it's an example of where we've built enormous trust between the board and the management team. You know, we've been through a lot as a team.

8. 36:38

   And so we have a lot of shorthand to be able to make crucial decisions like this. We gathered several times in quick succession to make sure we drilled in on the key issues. And the board was fully supportive.