Companies need to have real revenue and produce real profit and then need a valuation based on sane multiples. Twitter got behind that curve badly and ultimately this is what happens.
Their problem is that costs are far out of line, which is why they're cutting. Twitter could turn a significant profit if they design for $3 or $4 billion in sales (rather than pretending they're heading toward $20 billion). Their margins should be comparable to Facebook's, their business is no more difficult to optimize.
They have 12% of the sales of Facebook, with ~38% of the employee base. It's an extremely poorly run, bloated business. They're built to scale to Facebook's size, but they will never achieve that size no matter what happens. Long-term they're a $20 or $40 billion market cap business, instead of $250 billion.
Layoff are the result of incompetent management, and nobody wants to work for a company staffed with incompetent managers.
Perhaps I missed it but no where did I see any specific mention that this was either surgical or across the board. Care to elaborate? If they didn't specify it certain could go either way.
It's not going anywhere in the next year or two. But in five years? Ten years?
Twitter's main problem is that it has one product, and it's possible to get bored with that product. It's not really possible to get bored of googling things or buying things off amazon, but it's entirely possible to get bored of twitter.
Remember when every man and his dog had a blog? (Or possibly a livejournal?) Remember when the word "blogosphere" was all over the news? What happened to all the blogs?
> What my vague acquaintance had for breakfast
> What my vague acquaintance had for breakfast
> What my vague acquaintance thinks about politics, which I need to grit my teeth and not reply to.
> Slightly amusing post from a well-known celebrity I follow, which someone will post on facebook later in the day anyway.
> Slightly amusing post from a well-known celebrity I quite deliberately don't follow, but which gets retweeted into my feed anyway.
> A politician I am starting to regret following wants my money.
> What some well-known celebrity I don't follow had for breakfast
Tools do something useful. Twitter doesn't -- at least, not for 95% of users.
They became listservs. Ironic huh?
Google's original investors were FUMING that the company didn't pursue ads earlier, following with what Yahoo did. In retrospect we now see the insight of that approach.
Twitter's problem is one of product. It's not innovating, it hasn't changed it's core formula in many years. Compare that to Google and Facebook which both made many bold improvements to their platforms after booming into success. (Though facebook one could argue has slowed down in its innovation.)
I wonder how many unicorns lack these criteria. Only Twitter has the discipline of public markets. If it doesn't deliver, public shareholders get burned.
If unicorns don't deliver, private investors get burned, but where do the losses go? VCs, founders, employees, as well as some family offices, banks, university endowments, pension funds...where else? And I sure am curious about the exposure of these last three groups.