Our thoughts of Musk’s massive Twitter layoffs

As we speak, a massive round of layoffs is taking place at Twitter, as its new owner Elon Musk wastes no time to make radical changes. Some reports are saying that at least 50% of the 8,000-strong workforce is being axed.

A few friends in the community have asked for our thoughts on Musk’s twitter take over and specifically on the layoffs. Here are some of our thoughts:

1. The performance of Twitter as a company has been lukewarm since its IPO in November 2013. Regardless of the ‘free speech’ pretext (or excuse) for the Musk take over – the shakeup should be interesting for (and welcomed by) users and observers;
2. Will Musk make Twitter work? Not sure – this is a different product compared to what he has run in the past (and currently). But at least he has a track record of delivering (and iterating) products under very difficult circumstances – so there is a chance there;
3. It seems many engineering, middle and back office roles have been axed – while the sales/front office roles are much less affected. This is easy to understand because the company will still need to make money while product/business model changes are undertaken – you do not want to lose contact points with large customers;
4. Depending on how eventually the new business model (and product) is taking shape (and there seems to be an active discussion on this on Twitter), more shakeups might be expected;
5. If Musk manages to pull Twitter off with much leaner headcount – other big tech companies might feel the pressure on their large workforce and employee benefits;
6. When that happens, some boards/management will have an excuse to trim their workforce (citing the Twitter precedent and investor pressure), without causing too much revolt from managers whose underlings are made redundant;
7. Chinese tech companies have been very good at that game;
8. Unlike employees laid off in PE-acquired companies, many Twitter employees are talented and would be able to find good jobs elsewhere. The lesson for everyone, however, is not to get too comfortable in their career because change might come unexpectedly;
9. As we mentioned in a previous commentary, “Young people should, instead, get more exposure about the key trends in the macro environment and prepare themselves really for the future growth opportunities.”
10. We hope this episode will turn out to be good for the career of those affected by layoffs, but also for the ecosystem in general (as startups, earlier stage companies, or even traditional companies in transformation will be able to absorb some of the talent here) as we shared in our commentary on play the long game and future proof your career.
11. Rumours have that Jack Ma has already figured out this narrative.

And if you take a wider step back in history, remember Apple,  the “troubled computer maker” cutting 4000 people back in 1997? Here is a snapshot of the CNN news: 

Let’s leave it at that.