Musk’s inner circle worked through weekend to cement Twitter layoff plans
washingtonpost.com
washingtonpost.com
https://www.nytimes.com/2022/04/25/technology/twitter-employ...
> At the meeting with employees on Monday [April 25], 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.
So, really those two long sentences should be rewritten:
Mr Agrawal, as an officer of the company, engaged in rampant speculation, perhaps to reassure employees (or himself) that their jobs were safe for three months to a year, even though Mr. Musk had repeatedly indicated otherwise.
Even laying off 25% of the workers would be hard to justify at this point. I'm certainly curious where this all is going.
The downside of employee protections is that it makes companies more reluctant to hire. And also once hired, the salary to be offered is reduced to cover the estimated current value of the future employee protections. These are real downsides, particularly for young people who are trying to get a foot into the corporate ladder.
I have even personally witnessed a situation where a company evaluated a legal change to increase employee protections, and decided to layoff almost everyone in a particular country before the new law took effect. (The company was Pictage, the country was Argentina, and this was a bit over a dozen years ago.)
So I'll take the up front downsides of at will over the hidden downsides of employee protections.
It wouldn't because we're in a downturn and Twitter was already planning layoffs.
Their CEO told them no layoffs were planned in the immediate future just a few months ago.
Those that remained productive will probably have better prospects for keeping their jobs, and for suing if they're fired.
To a first approximation I would guess 0.
When a company is teetering on calamity, people don't just stop doing things, they just stop doing things in organized, co-ordinated ways.
More than that, firing people for cause usually requires records and a demonstration of dialog the the person (not all jurisdictions) and is hard to demonstrate.
The only parties being cited as fired for cause are the outgoing executives, and WaPo article at the top of this post provides reasons for that.
Elsewhere in this thread, people are discussing a potentially-credible (but maybe you disagree) report on this from Gergely Orosz that does not paint this as "only the 3 senior executives".
https://twitter.com/gergelyorosz/status/1587042365084209153
> I talked with an engineering manager who was at Twitter for 5+ years, and got laid off on Sunday "for cause". They were too exhausted from working over the weekend to talk longer: they first need to sleep.
And the WaPo article states: “ The first round of layoffs, led by his lawyer Alex Spiro, will target 25 percent of the workforce”
I think this might be the confusing part, because he's trying to claw back as much compensation as possible, maybe he's trying to avoid paying severance as well
Why would this be? Musk has already signaled his lack of confidence in the previous management, why would this not extend to their hiring practices, training, HR policies, etc.?
https://twitter.com/gergelyorosz/status/1587042365084209153?...
> I talked with an engineering manager who was at Twitter for 5+ years, and got laid off on Sunday "for cause". They were too exhausted from working over the weekend to talk longer: they first need to sleep.
Musk doesn't meet the cause outlined in their employment contracts. They'll get their executive early termination severance but it'll require some legal action first.
I had reports from friends who worked there that they were asked to stay available over the weekend, presumably for situations like this, or requests from the "war room" group that has been setup.
Does this mean that they have or deserve different rights under contract law than others do? What if their counterparty is even less "strapped for cash"?
Now, at some level, it still stinks that the CEO is getting paid so many tens of millions of dollars for less than a year's worth of work. To solve that, you'd have to cut CEO pay in the first place, because just removing the parachute would incentivize clinging to their existing paychecks.
The "for cause" bit is a transparently vindictive breach of contract. They will get their money and then some. In fact they may know some lawyers who know how to take Elon's money.
Closing the sarcasm, yes, layoffs have costs (various costs, including to the morale), but there are reasons why organisations do them anyways.
I actually think that, below the CEO level, the managers are engaged in wishful thinking, rather than deceit.
>He requested that logged out users visiting Twitter.com be redirected to the Explore page that shows trending tweets and news stories, according to employees familiar with the matter who requested anonymity to speak without the company’s permission. Before, visiting Twitter’s homepage while logged out showed only a sign-up form,
- https://twitter.com/joshelman/status/1586812933043933184
> Changing the logged out home page of Twitter to show more content is likely one of those “easy fixes” that has symbolic effect but very little to no metrics effect. I ran A/B tests on this in 2010. Usually the best way to grow Twitter active users is make people sign up first
How do the designers who work at these tech companies not understand that repeatedly annoying non-user visitors doesn't make them want to sign up? Nor incentivize others to link to it?
They'll tolerate you if you produce content to help keep the paying users engaged, but plenty of businesses choose not to pursue customers who are unlikely to generate profit.
It absolutely does, and that is precisely why they keep doing it. It doesn't work for the kinds of people that browse hackernews, but that's not their core audience anyway.
It's like saying ads don't work because you and me never click them because we use an adblock. Clearly they do work, and quite well...
Other instances here:
the site works whenever i login via a fresh, private browser session. for a minute i thought i was blocked after muting the words "elon" and "musk"
Doesnt work for me
Corporate raid is aimed at making changes to the company specifically to increase share price. The idea is that the resulting share price increase covers at least significant part of the cost of getting majority stake. This makes the buyout relatively cheap or even free.
Which of course makes little sense if you are also taking the company private.
I would also like to point out that the whole point of buying a controlling stake in the company usually is to exert some control. And to buy it out completely and take it private is to exert complete control without having to explain yourself (too much).
There is, of course, possibility of the investor buying shares because they are content with current management and do not plan to interfere even after they have acquired majority stake. But this, in my experience, is quite rare.
I don’t care what Elon does with Twitter tbh, as long as it’s something different. Good luck to him.
Musk won't change anything for the better.
Elon wanted to back out and the executives finessed him masterfully. Everyone with vested shares is a recipient of a $44,000,000,000 cash infusion into the bay area economy, while media stupidly focuses on cliffs and parachutes that wont be paid.
Everything in this story is a complete mess. The acquirer, his attitude towards workers, the entitlement and complete delusion of the workers and even more than that the misleading of the public AND the workers of the previous arguably failed management, along with their belief that they are the ultimate gatekeepers of truth in this world.
I'm not sure what deeper societal lesson this whole thing entails, but it definitely in part shows two societies, both of which are completely detached from the normal hardships an average human on this planet has to go through.
You look at your bank account and think "yeah, I AM a Rockstar! I DO deserve this! Everybody wants to be ME!"
Rinse and repeat that general attitude for ten years or so and blammo (which is even more explosive considering large chunks of the millennial generation were already coddled—and yes, I'm a millennial). You get a bunch of entitled brats who view anyone who isn't doing what they're doing as _less than_ (which is ironic considering those "less-thans" keep the bubble they live in running—electricity, food delivery, sewage systems, etc).
Pepper in the absolutely psychotic, cult-level diatribe these people sputter about "changing the world" and "making dents" and you have a low-level Jim Jones field jamboree brewing. It's absolutely zero surprise what's come out of SV over the last decade and change.
And that doesn't even factor in the pharmaceuticals!
I imagine that at this point, many are staying until they get fired so they can collect severance pay.
That is what I would do. I absolutely would not work for Elon’s Twitter long term unless they paid me a king’s ransom, but I would definitely stick around and jump through the hoops just long enough to get a nice payout.
it's the epitome of Twitter, overflowing with righteous indignation online but won't get off their ass to do anything IRL.
"Workers" is strange to me when talking about people who make 5-10x the national average (i.e. make more than many average executives in other industries). They're employees, but "workers" implies blue collar in my opinion. I'm fine with including staff in retail, restaurants etc, but someone making $500k+ a year doesn't fit into that category.
How is it legal to (even threaten) firing if a new assigned task that takes a long time is not done on time?
You can fire an employee for no reason at all since employment is "at will". Musk probably assumes a good deal of the workforce is lazy and/or incompetent and he doesn't want to pay them. So he's figuring out who to fire.
Usually your contracts doesn't specify time worked per week, only that you finish your work.
I personally can’t see a good reason why it should be illegal outside the rare edge case where there is only a single employer in a geographical region, and even that unfortunate situation should probably be remediated with a different type of government intervention.
Employers should be able to be unreasonable and shoot their business in the foot, no?
I think this is a reality check and a power play by Musk to remind employees of the fact.
https://twitter.com/elonmusk/status/1586885887341645824
I have a hard time believing there was not complicity between the 3 key execs, and Yoel Roth, according to that image.
This wasn’t needed and will be looked upon with embarrassment by him and all of tech in a decade.
For sure it will be a hard time for the current team - both those that stay and those that go as it is with any significant change.
Solving the problem of fossil fuel for private transport? Meh.
Massive cost reductions in space exploration and development of reusable rocket boosters and technology to get us back to the moon? Pushover.
Ensure more people can drop the n-word and spread disinformation and hatred of democracy for free? This is important.
Cash flow last year $630 million.
I think 25% staff reductions is just a starting point.
From 2016, the Glazers paid themselves annual dividends from the club, at over
£20 million every year from 2016 to 2020. In that same period, the club's debt
repayments "all but ceased", described The Daily Telegraph, while interest
payments continued. While paying dividends was common in business,
Manchester United were the sole Premier League club to "pay regular
dividends of any kind", reported The Daily Telegraph in May 2021
LBOs were a cure to the poison of the post-war conglomerate [1]. Those were run as personal fiefdoms by aloof executives and their cronies.
The traditional check was M&A. Conglomerates having no clean competitors, this–in practice–meant a buyer putting up cash and borrowing the rest, buying the company, taking out a loan in the company's name, using that to pay themselves and then paying back the personal loan. The only purpose the buyer's credit served was to gatekeep. LBOs compress that process, letting anyone challenge management if they can convince investors/lenders to back their vision.
The problem is, when the Fed gives out exceptionally cheap interest, it makes it incredibly easy to apply this strategy even when the underlying business would not benefit from it.
We simply left the tap on _way_ too long.
In these cases, cutting expenses by firing people is usually the first step, since the business' revenue stream can usually continue on autopilot for a while.
I expect Twitter to report record-breaking profits next quarter and Twitter's share price to go up accordingly. Maybe even enough to fill in some of Musk's hole.
[1] https://www.federalreserve.gov/econres/notes/feds-notes/unde...
https://www.statista.com/statistics/272140/employees-of-twit...
I remember it was a common meme on HN to ask what Twitter's thousands of employees did all day, even back in 2015. So maybe I'm falling into that trap. But I do still wonder.
They only have made a profit 2 out of the last 10 years.
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.
Cut expenses to the bone, resulting in a higher profit margin on the same revenue, coast on that revenue while dismembering the business for anything valuable, and then load any transferable debt to the carcass and declare bankruptcy?
Before reels or tiktok or stories or shorts, there was vine and people loved it. But it didn't make any money.
The video was posted by a remote financial analyst who was visiting the SF office for the first time. She describes what amounts to maybe an hour of break time, including lunch -- the rest of her day is meetings and working time. The perks are nice, maybe too nice you could argue, but the notion that the video proves she (and other Twitter workers) don't do any "real work" is idiotic. It's a short video, a tiny sample of her work day -- why would she dedicate any portion of it to showing her crunching numbers in Excel or whatever?
Part of me hopes he does, because that's the only way the Tall Poppy Syndrome folks have any chance of learning. But most of me has more empathy than they do.
More than likely they’re fairly normal employees. Granted they make more than most but that doesn’t mean they have “Tall Poppy Syndrome”.
The ONLY bad guys in this scenario are Musk and his yes-men
1. Twitter, the core application, is literally a weekend junior dev project. The only engineers on the payroll who provide actual value, out of THOUSANDS, are those who scale the application and infrastructure. The vast majority of these people have been paid huge comp packages for doing effectively nothing. Sure, there are auxilliary applications like the ad platform, business intelligence, etc, but there is no world in which you need the enormous engineering staff they have to build or run these. Most of these people are useless.
2. Twitter employees have been complicit in curbing free speech, in a highly partisan manner, for years now.
> I really hope Musk doesn’t come for your job next
I suspect that if you provide actual, tangible value and you're not actively silencing people for using the wrong pronouns, you'll be safe.
So, don't accept anything that doesn't preserve your rights to your Tuesday equity grant.
Details here: https://edd.ca.gov/en/Jobs_and_Training/Layoff_Services_WARN
Key Provision: "Layoff of 50 or more employees within a 30-day period regardless of % of workforce. ...."
Penalties for Violation: "A possible civil penalty of $500 a day for each day of violation. Employees may receive back pay to be paid at employee’s final rate or 3 year average rate of compensation, whichever is higher."
"Employers who fail to provide notification must provide their laid-off employees with back pay and benefits for the period of the violation (which means the amount of time by which their advance notice fell short of 60 days)."
The value of ripping off the Band-Aid could easily be worth two months of severance in his mind.
I don’t see any reason to suspect they’re going to somehow violate the law and cost themselves additional fines if or when they do it. This is just about speculation about what Musk will eventually do.
I beat even Elon, at this moment, does not have a full accounting of what the layoffs will be. This is all just pure media hype and nonsense with very little basis in truth or reality
Unless I’m missing something, the only sources for this article are a mix of speculation and anonymous sources who can’t even agree with each other about the layoff.
There's actually quite an involved skill to reading and fully understanding this kind of writing - and it's infuriatingly difficult to pick up that skill (I've been developing it by spending time talking to professional journalists, but I'm still not there yet).
When you read "another person familiar with the deal who spoke on the condition of anonymity to discuss sensitive matters", you need to translate it to something more like the following:
The journalist who wrote this has found a credible source, who has insider knowledge.
That source has requested anonymity, and the journalist finds that request credible.
The journalist then used their skills and experience in writing about this area over the course of their career to evaluate if that source was trustworthy. They also considered if the source had their own motivations which could affect what information they chose to share and why.
The journalist may have then cross-checked that information against other sources of information to help evaluate its credibility. This becomes more important the more high stakes the claim in question becomes.
An editor (and potentially even separate fact checkers) evaluated the statement as well, and applied judgement as to whether it held up firmly enough to be published.
There are so many phrases like this in top-tier journalism. When an experienced journalist reads an article from someone else that says "a senior official in the administration said..." they can often narrow that down to just a dozen or so potential people, based on their knowledge of that beat.
As a non-journalist reading newspapers this is pretty infuriating, because there's this whole language that you need to know about in order to fully understand what's being communicated here.
Click bait headlines, stories with weak fact checking or even printing outright lies has decreased (at least my) trust in news articles and has resulted in me questioning facts and anonymous quotes more frequently(which may be a good thing).
My perception of recent news tends is that sources that were in the accurate/quality tier are shifting to the fast/anonymous tier. In the short term their reputation plus speed and sensationalism will make them seem like the best of both worlds. In the long run people will just recalibrate their opinions of previously esteemed sources.
WaPo isn't the best of new reporting agencies [0], but it's certainly not the worst. They do have standards and they don't make up the large majority of their data. Meaning, they have actually talked to someone that is 'familiar' with the 'deal' at some point 'last week.' It's not pure speculation on WaPo's part, though it maybe pure-unrefined-grade-A speculation on the contact's part.
If I had to bet, and many HNers out there are currently in that seat, then I'd bet on their reporting over other forms of pure speculation.
[0] https://en.wikipedia.org/wiki/The_Washington_Post#Criticism_...
News agencies are organizations made of humans that have flaws and we should always treat with a critical eye. But we shouldn't just dismiss one out of hand as not one of the best because of the existence of a "Criticism and controversies" section on Wikipedia especially when it is FAR tamer than many mainstream competitors.
- four people familiar with the discussions who spoke on the condition of anonymity
- numerous employees contacted by The Post, who spoke on the condition of anonymity
- tweets from some of the people involved
- photos obtained by The Washington Post
- A document filed with financial regulators Monday
- interviews and documents obtained by The Post
- court records
Numerous employees - how much insight does a web developer at Twitter have into the inner workings of the management shift happening right now?
Photos of what? The conference room? Are we going to pull in a body language expert to analyze what Elon was saying by walking into the room with sneakers instead of dress shoes?
There is no accountability for sources in journalism, and it's why I think it's 99% useless garbage and never read it. Journalists and publications find the sources they want to tell the story they already planned to write regardless of reality.
They were told that these were performance based terminations, despite not receiving any negative evaluations during their time at Twitter. They were also told they needed to sign NDAs in order to receive any severance.
Can't confirm the %.
It's probably worth it to find a labor attorney.
Lots of coasters in big companies can get with good rating just be being on the good side of manager/peers and even get Bonus points if you are vocal about DEI and activism.
https://www.washingtonpost.com/search/?query=twitter+elon&fa...
Did a quick search of Elon + Twitter. Everything they reported seems factual and tied to things that actually happened? If Twitter does lay off a large amount of people will you admit that Washington Post probably had good sources or continue to be continually skeptical?
I think part of wanting a good media atmosphere is rewarding news sources that are shown to be reliable - and I would argue Washington Post is close to that.
This is basically what news is. The media "exploits" (reports on) current events, gets traffic and then pays its employees
edit: typoz
Potentially, but not necessarily. Some high performers may reasonably think "finally someone who is going to cut through all the bullshit in this bloated company and demand some accountability". Look through some of the stories when Steve Jobs rejoined Apple; it wasn't that dissimilar.
Now, that said, folks like this usually want and demand an inspiring leader. Some may think Musk fits the bill for that (I think I probably would have years ago), but these days I usually just want him to STFU with so much of the bullshit nonsense he sends out. I mean, the day after he closed the Twitter deal he tweeted a blatantly ridiculous and libelous story about Paul Pelosi - it's just more of the same stupid shit from him.
> The company has yet to release a formal announcement of the acquisition. The communications department has gone silent. Rumors have swirled about layoffs, with some notices going out quietly.
Is it just me or is this headline totally misleading?
No formal announcement yet folks.
This is how you get a press that only uncritically regurgitates press releases.
Seems Elon is keeping his machinations to himself.
Now, this of course assumes that engineering managers are not solely doing employee management but also are serving some "tech lead" type roles. I.e. even if an engineering manager isn't coding I think it's essential that (a) a considerable portion of their time is spent doing code reviews, (b) they should be working closely with product managers to define stories and requirements before the dev team starts implementing, etc.
That is, having line engineering managers solely do "people management" is universally a bad idea in my opinion. They should be getting their "hands dirty" in the tech aspects as well in order to be effective.
I doubt though that Musk can figure out the actual workhorse in a short time. The posers are very good at self promotion.
Weeding out those who change pronouns in documentation and agitate on Slack would be a reliable start. From there, close reading of PRs, their usefulness and code quality is required. LOC is not an indicator.
As for managers, most of them are useless.
> After engineers, some of Twitter’s highest paid employees work in sales, where several earn more than $300,000
that should reduce operating expenses significantly, several hundreds of millions dollars?
Boom 0 cost, infinite money hack
Tomorrow's news: "HN business man solved the recession"
Edit: per Wapo but you can see the cost structure from 10ks mostly
Terminating huge amounts of the workforce when they have next to no knowledge of the inner workings of the company... well, it's going to be a disaster, and I think all the tech people here know it. I'm sure there are some areas to cut, but they almost certainly don't know which yet. Cutting 25%, you're going to mess up. Then you have to face the reality that the other 75% will be seeking the exit - few want their workload to increase by 33%, plus work for someone as mercurial and abusive as Musk and his team, plus be a party to the dying company which will inevitably become a more effective tool of the alt-right and extremists.
Contract says you get the stock if you work for a certain period of time at the company. Consequently, if you're fired or quit before that period elapses, you don't get it.
Link: https://podcasts.apple.com/us/podcast/all-in-with-chamath-ja... Also on Youtube: https://www.youtube.com/channel/UCESLZhusAkFfsNsApnjF_Cg
Supposedly has a couple million listeners.
Sacks and Calacanis were named in the lawsuit between Twitter and Musk.
And it is very clear that none of them have any real tech insight, but a lot of VC / raccoon mindset.
Isn't the Tesla software allegedly a horrific mess? I suspect they may have been taking notes, instead.
Do either of these guys even know how to program? Calacanis has been making tech content for decades, and I've never once heard him talk about writing code.
1 - https://medium.com/craft-ventures/announcing-craft-iii-1-1-b...
To date there's:
- Reports that he had Tesla engineers with him when they interviewed some Twitter engineeers. Currently the biggest arguments against that are: Tesla engineers belong to Tesla (we have no idea in what capacity they were they) and "that's an ineffective strategy to review a codebase" (we have no idea if that's what they were actually doing.
- Reports that he gave a team until Nov 7th to roll out a paid subscription
- Reports that he may lay people off (unverified)
- Carried in a sink.
None of these things are particularly unreasonable - Twitter owes something like 1 billion in debt payments this year and brings in close to $500 million, so layoffs were probably coming regardless.
I don't really see what the big deal with Musk buying Twitter is, except as cover for being mad about him unbanning people.
1. It's not like this should come as a surprise to anyone at Twitter. If you work at Twitter and haven't been updating your resume and reaching out to other contacts, don't know what to say.
2. Remains to be seen what severance package laid off employees get, but with the California WARN requirements I think it's likely to be at least a couple months, which is fair. Looks like Musk tried to screw over some of the top execs by firing "for cause" (and note, in an exec's contract "for cause" can't just be "we don't like the job you did", it pretty much always has specific stipulations about breaking laws or company policy, e.g. sexual harassment), but they have more than enough resources to sue if necessary.
3. Is there anyone who reasonably thinks that Twitter has a lot of unproductive employees that should be let go? I think unions can do a lot of good, but not if it's the standard "once you're in the union it's nearly impossible to let you go" situation. Highly productive employees hate working with people who just "phone it in".
My guess is he plans to sue the board and the (now ex) CEO using the internal data to at least get back all the money they get (or more).
Somehow I think they will be specially focusing on twitter more
However he tweeted that there are 10 people managing for every one dev. https://twitter.com/elonmusk/status/1586686935518498816
Also Layoffs before vesting denied. https://twitter.com/elonmusk/status/1586831721386766337
Bring back Vine? https://twitter.com/elonmusk/status/1586918804780630016
What would the figure usually be.
You have marketing managers, people managing account maintenance, people managing bot reports, etc etc.
It seems to me, that's almost like complaining that an office or shop has 10 times more managers than maintenance guys. Both are locations where business are carried out rather than the actual business itself.
Not sure I would trust in tweets much. Twitter took on a lot of debt.
It's exhausting how much attention this gets and how everyone has an opinion about it.
Journalism continues to fall in the "bullshit" camp that Frankfurt warned us about:
https://press.princeton.edu/books/hardcover/9780691122946/on...
It's up to us to fine-tune our bullshit detectors in the current climate.
For example, I can't imagine the WaPo taking this same tone with regard to a Bezos acquisition or contract, or publishing confidential leaked details of inside business discussion, as it would almost certainly upset their owner and lead to 'a change in leadership' at the Post. The same is true of their coverage of the unionization effort at Amazon warehouses and distribution centers. Similarly, the CIA and NSA deals that AWS has engaged in aren't getting this level of scrutiny from the Post either, and there's little chance of the Post ever printing anything [like the 2010] "Top Secret America" series on how defense contracts are doled out to intelligence contractors.
Uhhh... you must not ever read WaPo. They run critical coverage of Bezos and Amazon all of the time.
They didn’t wake up in 2013 and suddenly decide they won’t have any integrity.