CEOs are doing layoffs because Elon dumped 80% of Twitter staff and it didn't collapse.
Those layoffs were a make or break moment for tech.
Those layoffs were a make or break moment for tech.
Have you looked at a graph of Twitter revenue and profit recently (hint: it is very low). Nobody has ever claimed that you cannot fire all the employees and keep Twitter online with a skeleton crew; the claim has always been that you can't do that _and remain a viable business_.
> The only insight we have
This is untrue. There's fairly credible reporting (e.g. in the FT) that Twitter's reveue numbers have bottomed and they are not making money. Of course, a lot of these problems are being disguised by the fact that Elon Musk has merged in xAI (and investors are very happy to pile money into AI without even the slightest due diligence).
Lots of people claimed that, it was a common claim, even on HN, which was odd to me because I felt it had been common for 10 years on HN to wonder what the heck these companies are doing with 80% of their employees.
No longer true. In March 2025, X Corp. was acquired by xAI, Musk's artificial intelligence company. The deal, an all-stock transaction, valued X at $33 billion, with a full valuation of $45 billion when factoring in $12 billion in debt.
Investor sentiment through secondary share trades still prices the company at $44 billion.
To be fair, the banks did offload the debt at par (two years later) so some people think X/Twitter is worth some money.
That was because Twitter was massively overstaffed. Are all these other businesses also overstaffed? The result of cheap money? Are they all atu
This has always been true for any mature companies.
The conundrum is that tech companies in particular are really averse to be perceived as mature companies, because their valuations have to be more grounded in reality.
What's the proof it was the only tech company being overstaffed?
For example Meta doubled its headcount during the pandemic without any increase in market share or new products. How do you explain that not being overstaffed?
Meta probably overhired, but if the overall market grows immensely due to even more commerce moving online because of the pandemic, it would make sense to hire a lot more people even without a change in market share or new products.
Anyone that ever worked in a sufficiently large tech company knows that it can keep the lights on with a skeleton crew. It doesn't mean the results will be good or desirable, but it can be done.
Over time cracks will start to show. New featurs are seldom delivered and half-assed. Bugs will take a long time to fix or just become part of the landscape. That sort of thing.
Twitter is a special case that Musk did not buy it to make it into a profitable company, or to make it more valuable, or to improve it in any way. He just bought it because he wanted to rid it of the "woke mind virus" (and factually tried to get out of the deal and was sued into actually buying it).
CEOs are doing layoffs for a variety of reasons, but mostly to improve profits by reducing costs. These cycles happen, and what it actually points to is that those companies are not seeing a viable path for growth at the moment that justifies their valuation. Layoffs with some vague gestures towards AI is a good smokescreen for the time being.
Only complete idiots actually work for a living in this day and age. A job is first and foremost a tool to get approved for a nice/nicer mortgage so that you can focus on your real career which is getting rich from real estate appreciation. Secondly a job is a tool for getting exposed to the right people so you can get an even better job and thus an even nicer mortgage. You can't waste your time at the office by actually working.
There were plenty of people working very hard on things that had no path to profitability/utility (beyond the attempt to get higher-ups promoted for "showing impact" or "ownership") or whatever. This was paired with incentives at this time for managers to have more underlings.
I have no idea of the ratio of this to "day in the life" TikToks, but there were lots of people working on things that had no utility or time horizon to be "valuable" in the business sense.