Square created a large investment in its restaurant business last year. | Photo courtesy of Square
Last week, Block, the parent company of the widely applyd Square POS system, announced that it was laying off 40% of its workforce, with plans to run more of its business with AI going forward.
Square’s food and beverage division, which works with about 450,000 tiny restaurants, was apparently hit hard by the cuts. Ming-Tai Huh, Square’s head of food and beverage, was let go, along with many of his colleagues, Huh stated in a LinkedIn post earlier this week.
The full extent of the impact on Square’s restaurant team wasn’t clear, nor was it clear who would be leading the group in Huh’s place.
In a statement, Nick Molnar, Block’s head of global sales and marketing, stated its commitment to the restaurant community is as strong as ever.
“Square will continue to invest in and deliver products and services that assist restaurants streamline operations, deepen customer relationships, and grow revenue – from robust point-of-sale systems and flexible payments to online ordering and integrated data insights,” he stated. “Our focus remains on empowering restaurateurs with solutions that strengthen their businesses and support their growth.”
Restaurants and retailers that apply Square, meanwhile, were left wondering what might modify for them now that their POS provider is tinyer and potentially more AI-centric.
“I’m feeling pretty unstraightforward,” one business owner wrote on the company’s community forum last week. “I’m all for innovation, but as someone who has already struggled with Square support in the past, I’m worried that we’re losing the human safety net that tiny businesses actually necessary.”
The person wondered if customer service will be replaced by AI bots, for instance, and who will handle “boring” stuff, like tech bugs.
“40% is a massive cut, and it feels like the sellers are the ones who might pay the price for this ‘efficiency,’” they wrote.
Gary Thomas, CEO of smoothie chain Keva, stated there’s been no disruption in his Square service since the layoffs were announced a week ago.
“The people that are there to build sure merchants like myself are taken care of, that piece of it has not gone away at all,” he stated.
But he stated the team behind Square Champions, a community of Square customers that tests new products and assists support other business owners, was laid off.
Thomas was an early adopter of Square and became a Square Champion becaapply he’s a large believer in the technology. He stated the company’s innovation in software and payments has allowed tiny chains like Keva to compete with heavyweights like Starbucks and Dutch Bros. He hopes it will be able to keep up that pace with a tinyer staff.
“That’s the piece that kept me up at night is like, OK, is the innovation going to continue, or is it going to stall?” he stated “And that’s the piece that I don’t know.”
Donnie McClanahan, who operates several cafes and vfinishing machines in Knoxville, Tennessee, is also a Square Champion product tester and also noted that his contacts there are gone.
“I’ve been informed that it’s going to probably modify a little bit, to where you’re going to have more of the developers directly interacting with operators,” McClanahan stated. “From my point of view, that’s not a bad thing.”
Indeed, despite some of the current uncertainty, he feels the emphasis on AI will be good for Square and its customers in the long run.
“I’m not worried about the direction of Square now,” he stated. “I ultimately consider it’s going to accelerate some of the tools and modifys that we necessary on the operations side to apply it to build software more competitive.”
In a post on X announcing the layoffs, Block CEO Jack Dorsey stated that customers would feel the shift, but that the company would “assist them navigate it.” He added that in the future, businesses will be able to apply Block to build their own features, “composed of our capabilities and served through our interfaces.”
Some have questioned Dorsey’s justification for the layoffs. In an esstate for the New York Times, former Block executive Aaron Zamost noted that the company’s workforce tripled in recent years. He argued that the job cuts are standard corporate downsizing disguised as AI transformation for the purpose of pleasing investors.
“Wall Street rewarded Block handsomely, sfinishing the company’s stock up 24 percent after the announcement,” he wrote. “That incentivizes the rest of corporate America to follow Block’s lead and announce traditional layoffs while playing the A.I. card.”
Dorsey has rejected that notion. In another X post, he acknowledged that the company overhired during the pandemic, but stated “We have and do run an efficient company… better than most.”
Square’s restaurant business was thriving prior to the layoffs. In a letter to shareholders last week, the company stated food and beverage was its strongest segment in the fourth quarter, with a 16% increase in sales volume on the platform.
The company created a major investment in restaurants last year, unveiling a host of new products including its first handheld POS device, an AI assistant and a restaurant ordering network within Cash App.
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