Hacker News Reader

Comment by thinkingemote | Hacker News Reader

Musk and friends compare Twitter to other tech companies and see that it's ratio of employees to revenue is lowest. He therefore thinks he must halve the number employees and/or increase revenue to get this ratio up.

From the chat log exhibits from the Twitter vs Musk case: https://danluu.com/elon-twitter-texts/#47

A VC (Jason Calacanis) does back of the envelope calculations:

Twitter revenue per employee: $5B rev / 8k employees = $625K rev per employee in 2021

Google revenue per employee: $257B rev2/ 135K employee2= $1.9M per employee in 2021

Apple revenue per employee: $365B rev / 154k employees= $2.37M per employee in fiscal 2021

Twitter revenue per employee if 3k instead of 8k: $5B rev/ 3k employees= $1.66m rev per employee in 2021 (more industry standard)

Elon: "Insane potential for improvement"

View on HN

It would be nice if revenue and employee count were completely independent. Heck, you could fire everyone except one person and have an incredibly high ratio! (Don’t fire that last person or else you’ll get a divide by zero error.)

Interestingly, he’s already tweeting out complaints about a massive drop in revenue. His theory is that this is caused not by his erratic behavior, but instead by activists who hate free speech: https://twitter.com/elonmusk/status/1588538640401018880?s=46...

I don't understand how anyone could not blame activists for this? They themselves are taking credit for it.

Who is "they"? Activist is an expansive noun that covers every possible viewpoint, so this is meaningless without further qualification. Is it randos on Twitter, or someone with actual clout?

IPG and ADL both pushing hard to pull advertisements.

https://mobile.twitter.com/ggreenwald/status/158860354056966...

Not to mention there’s countless cases of this happening over the last decade, across payment processors to CDNs.

Were the activists controlling ad spend?

Activists: take credit

Some dude: "it's totally not them!"

Why would he not think that?

I'll ignore for the moment questions about what "activists" is supposed to mean and whether it refers to a real group capable of making unified decisions. Regardless, it's just not great for leadership to blame a revenue drop on unrelated third parties even if those third parties are working against the company and taking credit for the revenue drop. This isn't like complaining that trolls came in and review bombed your movie on IMDb. Revenue is an actual metric. If the claim is that the revenue numbers are only very briefly down because advertisers are only pulling spend in response to some temporary PR issue, then sure, make that argument.

That tweet really makes me think he has gone paranoid / crazy.

“Activists groups pressuring advertisers trying to destroy free speech in America ?”

The dude is a conspiracy theorist now ?

Yes? He tweeted the Paul Pelosi's gay lover conspiracy last week.

If the last two years have taught us anything, intelligence is not correlated with the ability to believe conspiracy theories.

It's quite troubling, and with little recourse it seems?

To some extent he actually thinks he can’t do anything wrong except be “too ambitious.”

So the more undeniably-short-sighted-flat-out-wrong stuff he does the more logic goes out the window.

I'm sorry, but on Twitter this is hardly a conspiracy theory, just a normal day. Activists constantly pressure brands, for various reasons.

Musk's prime motivator for purchasing twitter seems to have been ideological. Of course people are going to oppose him on ideological grounds.

More succinctly, Musk performed an activist takeover.

Twitter could have let him out of the deal but forced it. This is all on the (now former) board of directors who probably received a nice payout for a new mansion.

He could have, at any time, just paid the 1bil breakup free.

That fee was for external factors causing the deal to fail. Musk was already committed. His attempt to walk away was construed as breach of contract, and he would be liable for much more than the fee if that had happened.

This was not an option with a publicly owned company. For the board members to walk away from this offer would have breached their fiduciary duty. They certainly benefitted as did everyone else with stock.

Only 3 years ago Twitter had 5000 employees. They now have 8000 in 2022. That's a massive headcount growth for a company whose stock price declined significantly since then.

And no notable features have been released

It seems like most of the layoffs are in trust, comms, creative, policy, wellness and those supporting these functions.

If the rumours of 50% downsizing are correct these functions were way bigger than I expected.

You didn't see Twitter Spaces, Fleets, Birdwatch, Tweet Editing, and Twitter Blue? Some of those features have been successful for them, some not, but they've been releasing features.

+ tipping, voice tweets, Patreon-style subscriptions for content creators, and being able to control who can reply to your tweets.

That is also the time period when they started showing a profit.

No new features, and from my seat I can see no new monitization model.

Where is all this new money coming from, and why do suggest it requires these new employees to keep that stream flowing?

Operating a massive, distributed, real-time ad platform requires lots of engineers.

But how many of the new hires are engineers? I've read it has mostly been middle management hires.

Elon claims there are 10 managers for every person coding. I don't believe that.

> No new features

Are the new features for advertisers rather than consumers?

There have been lots of new features like Twitter Spaces, tipping, voice tweets, Twitter Blue, Patreon-style subscriptions for content creators, controlling who can reply to your tweets, etc. However, some of the new features like fleets (temporary tweets) were deprecated.

This is an ignorant question: to what extent is it relevant that a hardware company like Apple effectively employs/contracts services of e.g. Foxconn to the tune of probably a million employees?

It feel a little bit misleading to take a look at company in isolation, as different companies have different dependencies and depths of integration.

Great point. Revenue reflects the value added of the entire supply chain, not just Apple's. EBITDA/employee instead of revenue/employee would be a more appropriate measure. GP's numbers revised:

  Twitter EBITDA per employee: $211mn / 8k employees = $26k per employee
  
  Google (Alphabet) EBITDA per employee: $93.7bn / 135k employees = $694k per employee
  
  Apple EBITDA per employee: $130.5bn / 154k employees = $847k per employee
  
  Twitter EBITDA per employee if 3k instead of 8k: $211mn / 3k employees = $70k per employee

Apple's a funny one when it comes to staff numbers as well - they operate over 500 stores around the world, so their employee count is somewhat "boosted" by that.

[redacted]: Hey Elon -my name is Jake Sherman.

I loled at this. Why redact the name if its in the content. SMH

Because his name is really Sake Jherman.

Purely looking at the math and the product portfolio, I would argue that since Twitter is such a single-product company, with a near-monopoly in this specific niche, it should have a much higher ratio.

Given these factors, I wouldn't be surprised if Mush cuts the employee base in half again.

Interesting that the conversation then turns into using Return-To-Office as a strategy for voluntary departures ("20%").

I think the employees are pretty expensive to keep, even compared to other tech companies. Twitter now has a lot of debt to service from the acquisition and I think the employees now get cash instead of RSUs (paid based on the acquisition price) whereas employees at other tech companies have effectively seen comp decrease as the stock prices went down.

So there might be some philosophical attempt to reduce headcount. There might also be some attempt to hire more later and at a lower price (or at least one that isn’t artificially high).

This is a great point. Employees at Twitter may be vesting RSUs that need to be converted at Elon's inflated purchase price. Even laying off those people today and rehiring all of them tomorrow would save the company a boatload of money.

How do you fire the right people? Where is the information about who to fire and who to keep coming from?

You don’t. You just fire the number based largely on cost and let the remaining people pick up the pieces.

I think you mean the remaining people leetcode?

At previous places I’ve been at it seems like it’s easier for higher ups to just blanket fire people and then rehire the important ones once people in the know complain. Not super efficient but definitely faster and comical in a depressing way.

If they do that outside the US they risk facing a fun series of expensive lawsuits.

https://www.bloomberg.com/news/articles/2022-11-06/twitter-n...

Those threads are gold!

“Maybe we don't talk twitter on twitter”

“Satya: Thx for the chat. Will stay in touch. And will for sure follow-up on Teams feedback!”

“jack [presumably Dorsey]: I'm off the twitter board mid May and then completely out of company. I intend to do this work and fix our mistakes. Twitter started as a protocol. It should have never been a company. That was the original sin.”

Larry [Ellison; Oracle] I agree that it has huge potential... and it would be lots of fun Elon: Absolutely:) [2022-04-26] Larry: Since you think I should come in for at least $2B... I'm in for $2B

Ok, what if Twitter was a protocol instead of a centralized operation run by a company? (Is this what Jack was getting at?)

The implications would be many -- and I'm skeptical scalability and the user experience would be comparable. Any good writings on this?

Most importantly, why would it be better as a protocol? Twitter's "problems" are social and not technological.

How were you able to include/exclude the contractors, apple also has large number of CW that you are excluding so these numbers are bogus imo.

So what you are saying is, these people are playing the game Who can extract the most money from your workers? How awefull

Reply on news.ycombinator.com