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Musk and friends compare Twitter to other tech companies and see that it's ratio of employees to revenue is lowest. He therefore thinks he must halve the number
by thinkingemote 4y ago
Musk and friends compare Twitter to other tech companies and see that it's ratio of employees to revenue is lowest. He therefore thinks he must halve the number employees and/or increase revenue to get this ratio up.
From the chat log exhibits from the Twitter vs Musk case: https://danluu.com/elon-twitter-texts/#47 https://danluu.com/elon-twitter-texts/#47
A VC (Jason Calacanis) does back of the envelope calculations:
Twitter revenue per employee: $5B rev / 8k employees = $625K rev per employee in 2021
Google revenue per employee: $257B rev2/ 135K employee2= $1.9M per employee in 2021
Apple revenue per employee: $365B rev / 154k employees= $2.37M per employee in fiscal 2021
Twitter revenue per employee if 3k instead of 8k: $5B rev/ 3k employees= $1.66m rev per employee in 2021 (more industry standard)
Elon: "Insane potential for improvement"
- dmix 4y agoOnly 3 years ago Twitter had 5000 employees. They now have 8000 in 2022. That's a massive headcount growth for a company whose stock price declined significantly since then.
- pyrrhotech 4y agoAnd no notable features have been released
- scarab92 4y agoIt seems like most of the layoffs are in trust, comms, creative, policy, wellness and those supporting these functions. If the rumours of 50% downsizing are correct these functions were way bigger than I expected.
- GVIrish 4y agoYou didn't see Twitter Spaces, Fleets, Birdwatch, Tweet Editing, and Twitter Blue? Some of those features have been successful for them, some not, but they've been releasing features.
- peanuty1 4y ago+ tipping, voice tweets, Patreon-style subscriptions for content creators, and being able to control who can reply to your tweets.
- estomagordo 4y agoThat is also the time period when they started showing a profit.
- SV_BubbleTime 4y agoNo new features, and from my seat I can see no new monitization model. Where is all this new money coming from, and why do suggest it requires these new employees to keep that stream flowing?
- ketzo 4y agoOperating a massive, distributed, real-time ad platform requires lots of engineers.
- partiallypro 4y agoBut how many of the new hires are engineers? I've read it has mostly been middle management hires.
- peanuty1 4y agoElon claims there are 10 managers for every person coding. I don't believe that.
- chrisseaton 4y ago> No new features Are the new features for advertisers rather than consumers?
- peanuty1 4y agoThere have been lots of new features like Twitter Spaces, tipping, voice tweets, Twitter Blue, Patreon-style subscriptions for content creators, controlling who can reply to your tweets, etc. However, some of the new features like fleets (temporary tweets) were deprecated.
- arrrg 4y agoHow do you fire the right people? Where is the information about who to fire and who to keep coming from?
- morelish 4y agoYou don’t. You just fire the number based largely on cost and let the remaining people pick up the pieces.
- estomagordo 4y agoI think you mean the remaining people leetcode?
- washywashy 4y agoAt previous places I’ve been at it seems like it’s easier for higher ups to just blanket fire people and then rehire the important ones once people in the know complain. Not super efficient but definitely faster and comical in a depressing way.
- vidarh 4y agoIf they do that outside the US they risk facing a fun series of expensive lawsuits.
- washywashy 4y agohttps://www.bloomberg.com/news/articles/2022-11-06/twitter-now-asks-some-fired-workers-to-please-come-back?leadSource=uverify%20wall https://www.bloomberg.com/news/articles/2022-11-06/twitter-n...
- deleted 4y ago[deleted]
- q1w2 4y agoPurely looking at the math and the product portfolio, I would argue that since Twitter is such a single-product company, with a near-monopoly in this specific niche, it should have a much higher ratio. Given these factors, I wouldn't be surprised if Mush cuts the employee base in half again.
- plgonzalezrx8 4y ago[redacted]: Hey Elon -my name is Jake Sherman. I loled at this. Why redact the name if its in the content. SMH
- joenathanone 4y agoBecause his name is really Sake Jherman.
- tshaddox 4y agoIt would be nice if revenue and employee count were completely independent. Heck, you could fire everyone except one person and have an incredibly high ratio! (Don’t fire that last person or else you’ll get a divide by zero error.) Interestingly, he’s already tweeting out complaints about a massive drop in revenue. His theory is that this is caused not by his erratic behavior, but instead by activists who hate free speech: https://twitter.com/elonmusk/status/1588538640401018880?s=46&t=QNEepiWyTF8ta616WeeJfA https://twitter.com/elonmusk/status/1588538640401018880?s=46...
- mrits 4y agoI don't understand how anyone could not blame activists for this? They themselves are taking credit for it.
- Kye 4y agoWho is "they"? Activist is an expansive noun that covers every possible viewpoint, so this is meaningless without further qualification. Is it randos on Twitter, or someone with actual clout?
- nwienert 4y agoIPG and ADL both pushing hard to pull advertisements. https://mobile.twitter.com/ggreenwald/status/1588603540569661441 https://mobile.twitter.com/ggreenwald/status/158860354056966... Not to mention there’s countless cases of this happening over the last decade, across payment processors to CDNs.
- deleted 4y ago[deleted]
- jeremyjh 4y agoWere the activists controlling ad spend?
- bsagdiyev 4y ago
- Someone1234 4y agoInteresting that the conversation then turns into using Return-To-Office as a strategy for voluntary departures ("20%").
- dan-robertson 4y agoI think the employees are pretty expensive to keep, even compared to other tech companies. Twitter now has a lot of debt to service from the acquisition and I think the employees now get cash instead of RSUs (paid based on the acquisition price) whereas employees at other tech companies have effectively seen comp decrease as the stock prices went down. So there might be some philosophical attempt to reduce headcount. There might also be some attempt to hire more later and at a lower price (or at least one that isn’t artificially high).
- tdeck 4y agoThis is a great point. Employees at Twitter may be vesting RSUs that need to be converted at Elon's inflated purchase price. Even laying off those people today and rehiring all of them tomorrow would save the company a boatload of money.
- gopuck16 4y agoHow were you able to include/exclude the contractors, apple also has large number of CW that you are excluding so these numbers are bogus imo.
- NikolaNovak 4y agoThis is an ignorant question: to what extent is it relevant that a hardware company like Apple effectively employs/contracts services of e.g. Foxconn to the tune of probably a million employees? It feel a little bit misleading to take a look at company in isolation, as different companies have different dependencies and depths of integration.
- nequo 4y agoGreat point. Revenue reflects the value added of the entire supply chain, not just Apple's. EBITDA/employee instead of revenue/employee would be a more appropriate measure. GP's numbers revised: Twitter EBITDA per employee: $211mn / 8k employees = $26k per employee Google (Alphabet) EBITDA per employee: $93.7bn / 135k employees = $694k per employee Apple EBITDA per employee: $130.5bn / 154k employees = $847k per employee Twitter EBITDA per employee if 3k instead of 8k: $211mn / 3k employees = $70k per employee
- madeofpalk 4y agoApple's a funny one when it comes to staff numbers as well - they operate over 500 stores around the world, so their employee count is somewhat "boosted" by that.
- antipaul 4y agoThose threads are gold! “Maybe we don't talk twitter on twitter” “Satya: Thx for the chat. Will stay in touch. And will for sure follow-up on Teams feedback!” “jack [presumably Dorsey]: I'm off the twitter board mid May and then completely out of company. I intend to do this work and fix our mistakes. Twitter started as a protocol. It should have never been a company. That was the original sin.” Larry [Ellison; Oracle] I agree that it has huge potential... and it would be lots of fun Elon: Absolutely:) [2022-04-26] Larry: Since you think I should come in for at least $2B... I'm in for $2B
- anon400232 4y agoOk, what if Twitter was a protocol instead of a centralized operation run by a company? (Is this what Jack was getting at?) The implications would be many -- and I'm skeptical scalability and the user experience would be comparable. Any good writings on this?
- PestoDiRucola 4y agoMost importantly, why would it be better as a protocol? Twitter's "problems" are social and not technological.
- runarberg 4y agoSo what you are saying is, these people are playing the game Who can extract the most money from your workers? How awefull