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Snap got absolutely destroyed in the markets a few days back, so I just casually looked at some of their stats. They have 6000 (!) employees, a market cap of $2

Snap got absolutely destroyed in the markets a few days back, so I just casually looked at some of their stats. They have 6000 (!) employees, a market cap of $20bln (after losing 40% of their value in a day) and a PE ratio of 53. There is such an inordinate amount of bloat in the tech sector that it boggles the mind. Money was being blasted at tech through a firehose of epic proportions. Once that stops, my gut feeling is that a lot of companies are going to have to undergo massive layoffs. I have zero quantitative evidence for this but IMO less than half the engineers are actually needed to run these businesses. What happens with the other half is anyone's guess.

onlyrealcuzzo 4y ago
Way less than half the engineers are needed to keep the lights on. Keeping the lights on isn't enough. You want to grow. You have competitors that will do more than keep the lights on to take your market share.
- bosie 4y ago
  what's the engineering to employee ratio at companies like snap?
- Der_Einzige 4y ago
  We saw this to be categorically not the case with Twitter. No competition despite nothing but network effects preventing competitors from emerging, lots of engineers, lots of time, and no added features. The engineers did BS useless work or worse, did nothing the past several years.
- short_sells_poo 4y ago
  I'd argue many (most?) of these companies do not innovate or grow. What innovation has come out of Snap/TikTok/Twitter/{insert name here}? They make one product, get ballooned up with endless cash (or used to) and then do nothing for years because they don't really need to do anything as long as money keeps flowing. I'd argue many (most?) of these companies have so many employees not because they need all that manpower, but because the majority of management is engaged in empire building. As a department head/PM, more headcount = more power = more prestige = even more headcount = ... I'd therefore argue that less than half the engineers are needed even if these companies wanted to grow. They only have so many employees because they had more cash than what they could put into actual innovation. You can see this everywhere. Very smart PHDs get hired all over the place for very impressive salaries and the vast majority of them do absolutely useless busywork at best.
sokoloff 4y ago
A lot of tech companies have a negative PE. In that context, a 53 PE doesn’t seem so bad.
puranjay 4y ago
Coinbase: 5000 employees, $18B market cap What are 5,000 employees even doing at Coinbase?

onlyrealcuzzo 4y ago

Way less than half the engineers are needed to keep the lights on. Keeping the lights on isn't enough. You want to grow. You have competitors that will do more than keep the lights on to take your market share.

bosie 4y ago
what's the engineering to employee ratio at companies like snap?
Der_Einzige 4y ago
We saw this to be categorically not the case with Twitter. No competition despite nothing but network effects preventing competitors from emerging, lots of engineers, lots of time, and no added features. The engineers did BS useless work or worse, did nothing the past several years.
short_sells_poo 4y ago
I'd argue many (most?) of these companies do not innovate or grow. What innovation has come out of Snap/TikTok/Twitter/{insert name here}? They make one product, get ballooned up with endless cash (or used to) and then do nothing for years because they don't really need to do anything as long as money keeps flowing. I'd argue many (most?) of these companies have so many employees not because they need all that manpower, but because the majority of management is engaged in empire building. As a department head/PM, more headcount = more power = more prestige = even more headcount = ... I'd therefore argue that less than half the engineers are needed even if these companies wanted to grow. They only have so many employees because they had more cash than what they could put into actual innovation. You can see this everywhere. Very smart PHDs get hired all over the place for very impressive salaries and the vast majority of them do absolutely useless busywork at best.

sokoloff 4y ago

A lot of tech companies have a negative PE. In that context, a 53 PE doesn’t seem so bad.

puranjay 4y ago

Coinbase: 5000 employees, $18B market cap What are 5,000 employees even doing at Coinbase?