Ask HN: What happens with stock grants for Twitter employees?
Did they cut comp in half? Vested stock will (I assume) be paid at $54.20, but for forward looking grants pending vest?
"At the meeting with employees on Monday, executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added."
Heh, we all know the truth, hence why the question pop-up in the first place. Elon will cut deep in left and right among employees within an year. I guess only 30% of existing ones will still work at Twitter in a year after deal is done.
(Also, some people may decide that they are no longer a cultural fit and subsequently go elsewhere, where the workplace politics will be closer to their ideals. So there will be certain turnaround of staff just from that.)
As for the top managers, they face a much more uncertain future, given that they are co-responsible for the current unsatisfactory situation.
It is possible that some of them will be replaced by other people who now work elsewhere and who will try their luck with remodeled Twitter.
There will likely be a major cultural shift at Twitter; for someone, deeply repulsive, for other people, possibly very attractive. So there might be significant staff churn even though the total numbers may stay similar.
That is, unless, you mean the massive manual censorship organization needed to "run" the current "algorithm", which Twitter will no longer be needing.
And they'll still have some kind of 'manual censorship organization' to enable them to operate legally in different countries, handling people posting illegal content and responding to law enforcement requests, bot detection, reports of harassment etc - that's going to be more than 500 people, for a company with the number of users Twitter has.
Are you seriously trying to tell me that some smooth operator can just come waltzing into a well oiled operation like Twitter Inc and simply purge thousands of highly skilled specialized knowledge workers assigned to an extremely complicated web scale project willy nilly?
What of all the accumulated institutional knowledge. Countless man (and woman) years of code optimizations. The massive ETL pipelines. The company culture. Truly the most valuable asset Twitter has is the talented people that work there. Surely it would all come crashing down.
But, what's it that they say -- pride goeth before a fall?
If Twitter collapses into a burning hulk is that -really- a bad thing?
I get that most view it as a proxy for business growth, but I fear there's a growing group of non-technical investors/leaders/founders who see FAANGs with 4000 engineers, so you're only successful if you have that many too.
I know nothing of how such massive-scale tech companies work, but just seeing what Twitter does, the ~8000 number seems crazy, doesn't it?
Headcount is an artifact rather than a choice, the amount of people working on Twitter will be a consequence of decisions made more than a decade ago, not as a consequence of how many people Twitter needs today to operate as they are today — which is true for all companies.
If we fail to effectively manage our growth, our business and operating results could be harmed.
We continue to experience rapid growth in our headcount and operations, which will continue to place significant demands on our management, operational and financial infrastructure. As of June 30, 2013, we had approximately 2,000 employees, an increase of over 1,800 employees since January 1, 2010.
..As we continue to grow, we are subject to the risks of over-hiring, over-compensating our employees and over-expanding our operating infrastructure, and to the challenges of integrating, developing and motivating a rapidly growing employee base in various countries around the world. In addition, we may not be able to innovate or execute as quickly as a smaller, more efficient organization. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could be adversely affected.
Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.
Moreover, liquidity available to our employee securityholders following this offering could lead to disparities of wealth among our employees, which could adversely impact relations among employees and our culture in general. Our transition from a private company to a public company may result in a change to our corporate culture, which could harm our business.
The marginal value of each extra employee is negative but you rake in so much cash from monetising all the free content users are making for you you'd be stupid not to spend it on wild ass bets.
If you have a product that takes 100 people to run but generates billions in revenue it is standard practice in public companies to just hire lots more people. It's mostly speculative in that you hope that one of those thousands of people will come up with something else that makes billions.
Is this the norm? Are there any eng orgs that exist without this padding? Is that spare capacity working on meaningless projects ever worth it?
Remember the twitter app was originally written by one guy - I bet that team has 50 people on it now, and it’s not better for it.
Engineers are constantly surprised at how necessary it becomes to do those things as a company grows, and how hard it is to do them well. Musk himself has been repeatedly surprised at how hard it is to scale operations efficiently, at both SpaceX and at Tesla.
Does your team work directly with devs or is there an intermediary offshore layer to manage the people actually pushing code? From what I read the variance in quality of offshore engs is huge. I get a lot of connection requests with offshore managers, don't know if they're worth it or you should just hire offshore devs directly and manage them yourselves. Its hard because you don't know the nuances and blindspots of engineers in different countries and cultural issues.
A) most of that is throwing manpower at corporate dysfunction
B) ive never seen an attempt to shed engineers that didnt inadvertently impact the core productive engineers. Worse, sometimes they end up being the first out of the door.
The good big companies are overstaffed by 2x. The bad big companies are overstaffed by 4x or more.
In a situation like this you likely won’t retain those 25%, assuming you can identify them (it’s not always clear who is really making things happen and why).
Those are top performers used to equity based comp. Many will leave.
Scale like Twitter does takes a lot of people to keep it running. You can always trim low performers but that too has a major morale implications. See: Uber
Now, technically the Bus Factor is more about the company completely collapsing, but in an optimal organization, each person is doing something critical to the survival of the company all of each workday. They aren't spending 4 hours on Facebook or creating meaningless menu changes no one cares about. Maybe if one of them were hit by a bus the company wouldn't be completely unable to function, but their coworkers would struggle to continue to keep everything running.
This isn't really a good plan in the long run, even if it is most efficient until someone gets hit by a bus, so instead you over staff a little. You can't quite just hire N extra employees at the company level and expect them to be able to jump in seamlessly to any gaps that appear as other employees quit or retire or die, so you instead end up overstaffing by 10-20%. To every group of five or ten employees, you add an extra whose job responsibilities overlap the rest. Now if someone leaves, you have their replacement already halfway ramped up, and you can spread their responsibilities around without creating too much stress.
Now, you could just let all of your employees work 10% less hard, now that they have someone else to help lighten the load, but that's not really efficient either. Granted, some of them will find a way, and that 40 hours nominal becomes 36 hours real work and 4 hours posting on HN, but you can still add some extra work on top.
So you tell your employees that, in addition to the bread and butter work that pays the company's bills, they also have to Do Something else. Maybe there are some ideas for improving the company's core product, new types of bread, different flavors of butter to try out. Maybe you tell them to spend 20% of their time on bluesky research.
This brings us to the problem of making changes to a big, complicated engineering project. When you are just maintaining a giant piece of software, that's kind of a linear problem -- you assign a person or two to each part of the infrastructure, and they keep it in shape. When you are improving the giant interconnected pieces of infrastructure, it becomes a quadratic -- if someone on Service A comes up with a neat idea for how to make it better, they're going to need people on Database B, Backend C, Frontend D, Logs E and twelve other departments to make corresponding changes to their pieces of the infrastructure as well.
So the end result of this is that you have a piece of software that could be maintained indefinitely by 2 people, you add a third for redundancy, a fourth and fifth to iterate on new features, and three or four more to keep up with infrastructure changes in related projects elsewhere in the company.
And ta-da, your simple project is now overstaffed by 4x.
I admire Elon's companies and the achievements they've made, but he has an extreme reputation of riding his employees like horses.
The rule of law is a good thing.
That said, in this situation, it’s unclear how Musk will behave: on the one hand, to ensure a smooth transition, it makes sense to maximise the chance that employees stay on — even if he intends to cut them eventually — but also this is Musk and so maybe he’ll see people who won’t be loyal to him self selecting to leave as a bonus and he’ll make it as easy for them as possible (by behaving in the least good way) even if it hurts the company.
On things not vested it’s typically up to the buyer. Obviously some incentive to not just annoy everyone to the point that they all quit, but the new buyer will generally quickly decide who they want to keep and won’t be too fussed if others just get pissed and leave. Reality is in transactions like this the employees are just another company asset for the new owner to sort out what to do with.
I remember when it was so important that financial guys still got their promised bonuses for staying on during the financial crisis. I mean, clearly they were titans of an industry they helped to destroy, saved at the behest of a government they despise, but who could really begrudge them a windfall?
Yes, this is common practice for good will and retention reasons. But generally not legally required.
Other clauses can force the buyer to acquire your stocks, like a tag along clause.
Presumably the treatment of unvested shares is somewhere in all the acquisition legal paperwork because it would need to be accounted for.
And there will need to be some other mechanism to replace vested with payouts over time.
Just saying “you’ll keep vesting” isn’t good enough. People will say ok I’ve got a good grant in 2023 and then my comp falls off a cliff.
They’ll either leave when that vest happens or sooner.
I follow a bunch of Tesla/Spacex accounts on Twitter and you can plainly see that any dissent from Musks wishes will be punished with online mobs and harassment. Currently they're all laughing at how massive they layoffs will be. I don't know why anyone would subject themselves to this.
> Twitter has no meaningful assets other than the talented people that work there.
I think the main asset of twitter is their userbase and more importantly their brand. The simple fact that twitter is at the core of politics and the news-cycle is where most of the value at twitter comes from. Twitter's engineers are vital to keeping twitter running. But that doesn't make it an asset. It's not something you can sell on or somehow convert into cash.
People kept saying that, if board didn't accept, then they would violate fiduciary duty.
Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.
In terms of fiduciary responsibility, here’s something I found: https://www.upcounsel.com/board-of-directors-fiduciary-duty
I believe you can be sued for breach of this, and can certainly lose your board seat. I would guess it will devalue the company if a breach were to occur.
I think it is just a vague guideline because in this instance the board didn't even try to negotiate for a few billions more.
Now that's a big if but IF you run with that as Musk's motivation, then he doesn't particularly care about making Twitter profitable. It'd be more valuable to him as another lever of influence on society generally.
Could Twitter become more than just a brawling drunken town square? Could it capture public goodwill by eradicating advertising from Twitter and offering an open-source encrypted email and messaging service outside the purview of Five Eyes? Then build off the manufacturing innovations Tesla pioneered and create a cheap open hardware phone?
Going private removes many of these limitations, allowing much more flexibility. Going private does mean you can no longer go to the most liquid market (the public market) for extra equity financing. And of course you need to buy out all the shareholders.