Here’s one way of thinking about this (not the whole picture of course): At annual profitability of $Y per employee, you have a bar for what you need to earn f

Here’s one way of thinking about this (not the whole picture of course): At annual profitability of $Y per employee, you have a bar for what you need to earn from hiring your marginal next employee. The “core” business top 1% might be earning $10Y per employee, but if you can earn $1.5Y per employee for 10k new hires to spin up new product areas, you would be negligent (and fired by the board) to not do so. This is one of the main reasons big companies tend to bloat. I think the narrative of “most companies are overstaffed” is a bit of an over-simplification. If the goal is to maximize shareholder return in the medium-to-long-term, this is not so. If the goal is to execute the core mission, sure, but that’s a much less valuable company in most cases. And from a portfolio theory perspective, probably a less durable one too, since you don’t have a backup plan. Now, Twitter never had $10Y per employee, so you could justifiably claim they are overextended. But I don’t think the same logic works for the MAGMA.