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IMO what Elon did at Twitter showed that some tech companies can shed a ton of staff and still operate. That put pressure on boards of other tech companies to f
by gnicholas 3y ago
IMO what Elon did at Twitter showed that some tech companies can shed a ton of staff and still operate. That put pressure on boards of other tech companies to figure out if they were overstaffed.
Simultaneously, Twitter dumping a bunch of employees put downward pressure on wages (for certain roles), which made the math even more compelling for companies that were on the fence. It became clear that you could probably lay off people now and then fill new roles (in strategic departments) with lower comp.
Once it was apparent that tons of companies were doing RIFs, the reputational hit of doing a RIF was greatly diminished.
Boards felt pressure from shareholders, and one domino fell after another.
- mullingitover 3y agoI'm not sure that twitter can really be held up as a success story here. Tesla is the worst performing stock in the S&P500, but that's only because twitter isn't public. If they hadn't sold, and hadn't had the layoffs, and simply stayed on course they likely would be fairly healthy right now instead of beelining toward insolvency.
- gnicholas 3y agoTwitter is complicated. I think much of its challenges are due to Elon's personality and other choices. If that stuff hadn't happened then they would have had much less of a problem with advertisers (and therefore, revenue). But regardless of whether it was ultimately/financially a success, there's no doubt that they cut a ton of salary expense, and the platform is still running. That was what other tech companies/board members/shareholders saw.
- basch 3y agoTesla has a PE ratio of 37.52. Microsoft has a PE of 37.6. Tesla isnt "performing" bad, and its price has roughly nil to do with how the company is doing. It's share price got insanely overvalued, and it corrected. Tesla is up 767% in the last 5 years, almost 10x the SP500.
- mullingitover 3y agoDown 34% YTD though. And Twitter has been written down over 70% since the acquisition. My point is just that the layoffs arguably did nothing to help, and may have hurt their ability to execute and thus cost them some big opportunities. "They didn't completely implode" isn't "success," any more than becoming blind and paraplegic by choice is "success" because you're still alive.
- HDThoreaun 3y agoElon buying twitter obviously a failure. The layoffs seem to be a success though