4 ms·

I wouldn't say I was cheering; I was simply acknowledging that, though difficult, Twitter certainly has too many employees for the amount of revenue they're bri

I wouldn't say I was cheering; I was simply acknowledging that, though difficult, Twitter certainly has too many employees for the amount of revenue they're bringing in, and I am skeptical of claims that Twitter will cease to function as they go from 8,000 employees to whatever the new number is (2,500 seems to be the latest)? There's certainly internal knowledge that is lost in a transition of that kind, but the amount of money Twitter was burning makes no sense, and while reducing numbers of engineers is risky (and complex systems require more engineers than most people assume), I completely believe that Twitter will be able to sustain the technical operations and move quickly in shipping product with a mere 2,000 engineers.

runako 4y ago
[I am explicitly not weighing in on whether this gambit will work or not. Could go either way, there is a lot of luck involved in business.] > Twitter certainly has too many employees for the amount of revenue they're bringing in This doesn't make any sense given that Twitter's revenue per employee (RPE) was roughly double that of well-run companies like Oracle or SAP and in the ballpark of EA and Adobe. This metric is a red herring currently being used to trim workforces. Which, that's the game and this is where we are in the cycle. But the ratio of revenue:employee doesn't tell the story here. Granted cost structures and business models are different across these firms, and Twitter likely could have cut some staff (they all likely will in coming months now that it is timely to do so). But that's exactly the point here: the Twitter ratio between employees and revenue works fine at other companies, and has done so for a long time. Expedia has built a sustainable business with a lower RPE than Twitter, and it is similarly a pure-play Internet company. From a strictly financial perspective, it's equally likely that there were other levers that could have equally been tuned to fix Twitter's persistent problems. IMHO the bigger problem was they are tooled as a high-growth company, but they were not growing fast. Even a modest bit of consistent growth, say 15% y/o/y, sustained for years, would likely have ameliorated their problems. Perhaps they have a large fixed cost to running Twitter, and they simply have not scaled the business enough to make it worthwhile yet -- could they double their business from the pre-acquisition base while only increasing staff 25%? That would be a good business! But I would guess the fundamental issue was that they are tooled for hypergrowth that is likely not on the radar. Big staff cuts, modest (but smaller) revenue drops, then aiming to grow at a slower, sustainable pace is pretty stock PE stuff (although they typically try to pay at or below market instead of much higher than market). Can only assume people who see this as genius have never observed PE work.
- austenallred 4y ago
  Twitter was continually on the cusp of breakeven and would have lost money the quarter ahead of Musk's takeover had they not sold MoPub. Even before Musk took over they had planned on a 25% headcount reduction. Their revenue per employee pales in comparison to other companies of its ilk, and I think we would disagree whether SAP and Oracle are well-run companies :)
  - runako 4y ago
    > Twitter was continually on the cusp of breakeven This also fits the model where they have a large relatively fixed cost base to operate, but could reap profits if they reached a larger elusive size. Again -- my hypothesis is they are tooled for hyper growth and the business has not been able to deliver that. Giving up on high growth and cutting to profitability is part of the stock PE playbook and definitely makes sense in the absence of strategies for generating massive growth. > we would disagree whether SAP and Oracle are well-run companies Interesting perspective, I meant it in the sense that they have operated for decades in competitive industries while making oceans of real profit for shareholders over that period. Most of us would be fortunate to run companies as poorly. :-)
    - austenallred 4y ago
      > Interesting perspective, I meant it in the sense that they have operated for decades in competitive industries while making oceans of real profit for shareholders over that period. Most of us would be fortunate to run companies as poorly. :-) Very true, but Twitter has lightning in a bottle captured the way few other companies do.
7sidedmarble 4y ago
It was the way the layoffs were conducted which was the objectionable part. Not even taking a week to assess means it was just haphazard.
- austenallred 4y ago
  That is fair. Elon took an 8,000 person company and went full "move fast and break things" mode.
  - throwaway2729 4y ago
    Went "unempathetic" mode. He didn't have to do what he did and in the way he did. You were cheering for him instilling fear in the remaining employees.
dragonwriter 4y ago
> Twitter certainly has too many employees for the amount of revenue they're bringing in Twitter was profitable (pre-Musk acquisition, and ignoring a one-time lawsuit settlement that wasn't an ongoing expense); it objectively did not have too much headcount (or other recurring expenses) for its revenue, prior to the added expense burden of debt service costs it was saddled with by Musk as part of the acquisition. Their recent failure to properly execute payroll in some European jurisdictions, and the fact that they apparently no longer have sufficient account managers to even stay in contact with major advertisers at a time when they are trying desperately to actively manage those relationships and maintain them despite the distrust the takeover has engendered seem to be signs that the cuts were to deep on the non-technical side for the operation that Twitter is trying to run; I don’t see any real analytical reason to reject that the same is true on technical side. (And that’s before considering that the reductions also seem likely to have broken both contract and, in many jurisdictions, labor laws, and legal costs associated with that are starting to mount, with at least one case already lost.)
filmgirlcw 4y ago
You were cheering. You’re still cheering. And you’re doing it while you’ve had continuous layoffs of your own staff that have put everyone who works for you, or anyone unfortunate enough to be part of your predatory boot camps, in jeopardy. I don’t take any joy or schadenfreude from your failures. Real people’s lives are involved and it genuinely makes me sad. But glass houses dude. Glass houses. Maybe when you’re own company is falling apart, you should refrain from publicly commenting on someone else’s.
- austenallred 4y ago
  I was not cheering, and my opinion is consistent; as money becomes much tighter companies have to rightsize themselves to the amount of revenue coming in. This is true across Silicon Valley and it is true of us. https://twitter.com/austen/status/1588336949403611136?s=46&t=Y3JHbuxO1A1ntOe7k9PbUg https://twitter.com/austen/status/1588336949403611136?s=46&t...
  - dzader 4y ago
    this is only true of shitty businesses built on scams and lies. company producing results don't need to.
    - austenallred 4y ago
      Sadly that’s not true. Even the very best of companies try to grow and occasionally miss and have to shrink, or layoffs would be far more rare.
  - throwaway2729 4y ago
    You had no empathy for the people getting laid off. The drama at Twitter was 'interesting' to you.
  - filmgirlcw 4y ago
    Why do you need to comment at all, I guess is my question. Why not spend the time trying to run your own business rather than callously argueing how over-staffed Twitter was. Why does that matter to you? You don’t work there. You aren’t one of Elon’s investors. Why not just keep your thoughts to yourself, the day 3700 people lost their jobs, instead of pontificating about how a company needs to rightsize itself? Especially when you had to know you were weeks away from laying off half your remaining staff. Someone else mentioned you need to spend less time online and you argued that you’re not that online and that the dopamine rush is worth it for you. Fine. Deal with it in therapy. But know that it looks incredibly tone deaf that the day you lay off half your staff (and the day after), you’ve spent hours debating yourself and justifying your actions on HN and shitposting on Twitter. Have some fucking tact.

runako 4y ago

[I am explicitly not weighing in on whether this gambit will work or not. Could go either way, there is a lot of luck involved in business.] > Twitter certainly has too many employees for the amount of revenue they're bringing in This doesn't make any sense given that Twitter's revenue per employee (RPE) was roughly double that of well-run companies like Oracle or SAP and in the ballpark of EA and Adobe. This metric is a red herring currently being used to trim workforces. Which, that's the game and this is where we are in the cycle. But the ratio of revenue:employee doesn't tell the story here. Granted cost structures and business models are different across these firms, and Twitter likely could have cut some staff (they all likely will in coming months now that it is timely to do so). But that's exactly the point here: the Twitter ratio between employees and revenue works fine at other companies, and has done so for a long time. Expedia has built a sustainable business with a lower RPE than Twitter, and it is similarly a pure-play Internet company. From a strictly financial perspective, it's equally likely that there were other levers that could have equally been tuned to fix Twitter's persistent problems. IMHO the bigger problem was they are tooled as a high-growth company, but they were not growing fast. Even a modest bit of consistent growth, say 15% y/o/y, sustained for years, would likely have ameliorated their problems. Perhaps they have a large fixed cost to running Twitter, and they simply have not scaled the business enough to make it worthwhile yet -- could they double their business from the pre-acquisition base while only increasing staff 25%? That would be a good business! But I would guess the fundamental issue was that they are tooled for hypergrowth that is likely not on the radar. Big staff cuts, modest (but smaller) revenue drops, then aiming to grow at a slower, sustainable pace is pretty stock PE stuff (although they typically try to pay at or below market instead of much higher than market). Can only assume people who see this as genius have never observed PE work.

austenallred 4y ago
Twitter was continually on the cusp of breakeven and would have lost money the quarter ahead of Musk's takeover had they not sold MoPub. Even before Musk took over they had planned on a 25% headcount reduction. Their revenue per employee pales in comparison to other companies of its ilk, and I think we would disagree whether SAP and Oracle are well-run companies :)
- runako 4y ago
  > Twitter was continually on the cusp of breakeven This also fits the model where they have a large relatively fixed cost base to operate, but could reap profits if they reached a larger elusive size. Again -- my hypothesis is they are tooled for hyper growth and the business has not been able to deliver that. Giving up on high growth and cutting to profitability is part of the stock PE playbook and definitely makes sense in the absence of strategies for generating massive growth. > we would disagree whether SAP and Oracle are well-run companies Interesting perspective, I meant it in the sense that they have operated for decades in competitive industries while making oceans of real profit for shareholders over that period. Most of us would be fortunate to run companies as poorly. :-)
  - austenallred 4y ago
    > Interesting perspective, I meant it in the sense that they have operated for decades in competitive industries while making oceans of real profit for shareholders over that period. Most of us would be fortunate to run companies as poorly. :-) Very true, but Twitter has lightning in a bottle captured the way few other companies do.

7sidedmarble 4y ago

It was the way the layoffs were conducted which was the objectionable part. Not even taking a week to assess means it was just haphazard.

austenallred 4y ago
That is fair. Elon took an 8,000 person company and went full "move fast and break things" mode.
- throwaway2729 4y ago
  Went "unempathetic" mode. He didn't have to do what he did and in the way he did. You were cheering for him instilling fear in the remaining employees.

dragonwriter 4y ago

> Twitter certainly has too many employees for the amount of revenue they're bringing in Twitter was profitable (pre-Musk acquisition, and ignoring a one-time lawsuit settlement that wasn't an ongoing expense); it objectively did not have too much headcount (or other recurring expenses) for its revenue, prior to the added expense burden of debt service costs it was saddled with by Musk as part of the acquisition. Their recent failure to properly execute payroll in some European jurisdictions, and the fact that they apparently no longer have sufficient account managers to even stay in contact with major advertisers at a time when they are trying desperately to actively manage those relationships and maintain them despite the distrust the takeover has engendered seem to be signs that the cuts were to deep on the non-technical side for the operation that Twitter is trying to run; I don’t see any real analytical reason to reject that the same is true on technical side. (And that’s before considering that the reductions also seem likely to have broken both contract and, in many jurisdictions, labor laws, and legal costs associated with that are starting to mount, with at least one case already lost.)

filmgirlcw 4y ago

You were cheering. You’re still cheering. And you’re doing it while you’ve had continuous layoffs of your own staff that have put everyone who works for you, or anyone unfortunate enough to be part of your predatory boot camps, in jeopardy. I don’t take any joy or schadenfreude from your failures. Real people’s lives are involved and it genuinely makes me sad. But glass houses dude. Glass houses. Maybe when you’re own company is falling apart, you should refrain from publicly commenting on someone else’s.

austenallred 4y ago
I was not cheering, and my opinion is consistent; as money becomes much tighter companies have to rightsize themselves to the amount of revenue coming in. This is true across Silicon Valley and it is true of us. https://twitter.com/austen/status/1588336949403611136?s=46&t=Y3JHbuxO1A1ntOe7k9PbUg https://twitter.com/austen/status/1588336949403611136?s=46&t...
- dzader 4y ago
  this is only true of shitty businesses built on scams and lies. company producing results don't need to.
  - austenallred 4y ago
    Sadly that’s not true. Even the very best of companies try to grow and occasionally miss and have to shrink, or layoffs would be far more rare.
- throwaway2729 4y ago
  You had no empathy for the people getting laid off. The drama at Twitter was 'interesting' to you.
- filmgirlcw 4y ago
  Why do you need to comment at all, I guess is my question. Why not spend the time trying to run your own business rather than callously argueing how over-staffed Twitter was. Why does that matter to you? You don’t work there. You aren’t one of Elon’s investors. Why not just keep your thoughts to yourself, the day 3700 people lost their jobs, instead of pontificating about how a company needs to rightsize itself? Especially when you had to know you were weeks away from laying off half your remaining staff. Someone else mentioned you need to spend less time online and you argued that you’re not that online and that the dopamine rush is worth it for you. Fine. Deal with it in therapy. But know that it looks incredibly tone deaf that the day you lay off half your staff (and the day after), you’ve spent hours debating yourself and justifying your actions on HN and shitposting on Twitter. Have some fucking tact.