Mark Zuckerberg explains why so many tech companies are doing layoffs
businessinsider.comZuckerberg said that companies are no longer shrinking their employee size simply because of overhiring — they're now realizing there can be benefits to being leaner.
While a lot of tech companies were reluctant to make cuts at first, they realized it didn't spell the end, Zuckerberg said.
Translation: They all saw Twitter cut 80% of its staff and yet is still online.
For executives at companies with higher job security than God, they must spin laying off "talented people we care about" in some positive light like "year of efficiency". So, I wouldn't read too much into whatever they say really is the main driver for these cuts.
you don’t need to read anything into it. the intended outcome of an increase in efficiency is an increase in money. efficiency is a polite way to say “more money for me.”
the main driver is “more money for me,” meaning more money for zuck, more money for shareholders, more money for the employees that remain.
They all saw Twitter cut 80% of its staff and go from making money to losing money and their market cap slash by 50+%.
If they saw that and thought they "we should do that too", they are idiots.
Being in business is about power and control, the money is a byproduct and a tool. The feds cut off funding and told the business world to sacrifice as much canon fodder as possible. “Leadership” loves cuts. They feel bold and dramatic, leaderly.
Twitter losing money is a political decision by advertisers. I don't mean this is a negative way- it might be perfectly legitimate- but it still has nothing to do with the technical viability of the service.
I agree that it has nothing to do with Twitter’s technical capabilities per se.
I disagree that it’s due to political decisions - it’s due to business decisions. To a large extent because Elon dropped the ball when major advertisers were figuring out their ad spend for 2023, but also because of a fear on their part of being associated with more and more unappealing content due to the new policies. Advertisers did not go ”oh, Elon wants more conservative content on Twitter, and because we support the Democrats, we’re gonna stop paying for ads on that platform to punish him”. They are acting in their own best financial interest.
Twitter’s finances are also hamstrung by the large amount of debt that Elon brought with his purchase, so in practice they need to perform even better than before.
If you don't want your brand to appear next to violent white supremacist material, is that a political decision, or is it a business decision to protect your brand image?
> They all saw Twitter cut 80% of its staff and yet is still online.
I remember the denialism on tech-focused forums like this one about that move, turns out it was the correct one from the owner's point of view. Of course that it s*cked big time for the employees being laid-off, but that's why we need to unionise in this industry and form some sort of solidarity/class consciousness, i.e. realising that the likes of "Zuck", "paulg", "Sam Altman" are not our friends, to the contrary.
There's a few things at play here.
First, Elon cut a bunch of "non-essential" core Twitter staff, like the trust and safety teams. This is going to cause long term brand damage - in fact, it already is!
Second, Elon completely cut all non-core Twitter projects. Twitter was being used by its major investors as a platform to build and test new social experiments and startup concepts. As far as I can tell, this was about 1000 engineers and product people. This was probably a pretty solid cut for someone like him, but also a pretty gross example of the whims of capital - who knows what great idea was killed off.
Lastly, when they say Twitter cut 80% of their staff, they never mentioned what happened after: massive attrition from people who "survived" but could go elsewhere. Way beyond what Elon thought would happen. Way beyond the 10-20% additional resignations after a normal layoff happens. This may have almost killed Twitter
If so, they missed the part of Twitter losing two thirds of its value.
It is not publicly traded, value estimates are more like political statements now. To the owner, getting running cost down may have made twitter long term viable.
>getting running cost down may have made twitter long term viable.
That may have worked, but Musk limited the reach of tweets by only allowing logged-in users to see the entire thread and comments.
Not to mention insulting advertisers.
Ads are still visible when you aren’t logged on, in fact they take a fare greater real estate of the screen now so Elon’s antics aside as far as advertisers go they get a better deal now.
Before the change you could scroll down past the ads for the rest of the thread, now you only see the linked tweet and then ads.
But it makes less sense to visit a Twitter link in the first place.
Without Nitter Twitter links are useless to me.
And Nitter instances get seriously rate limited now, so...
>They all saw Twitter cut 80% of its staff and yet is still online.
Maybe its a bit more complicated than that? If software is built around the business and if the business is no longer changing much maybe they simply don't need as many people around? After all, software can run hands off if you don't mess with it much.
IMHO it should be possible for musk to run Twitter singlehandedly all by himself if He has no intention to change anything. It should run fine until it needs something fixed due to a bug, a legal requirement or a partner change(some provider of some service changing something about their service).
Its kind of obvious that we are no longer in the age of Internet exploration, things are quite stagnant for some time and you don't need much explorers and sailors to do the same things. Know How is there, tools are mature. The average techie jobs have been automated to great extend, be it through tools they created or AI that can take care of busywork or understand legacy codebase without the need of retaining the people who built it.
The interesting things are happening in the AI, robotics and other areas but your average "tech" worker is not equipped to do these things.
>IMHO it should be possible for musk to run Twitter singlehandedly all by himself if He has no intention to change anything.
Not sure if this was a Freudian slip, but love the capital "He" here as if Musk is on the same level as God.
More like autocorrect :)
That’s what a true believer would say ;)
> Maybe its a bit more complicated than that
No its not.
FB copied the twitter verified as meta verified. Did not even change the name.
Twitter was working for anyone before. Now just for logged in. It is in saving mode.
If it’s even remotely true that 70% of the super bowl traffic they sent to advertisers came from bots… then maybe for much longer.
> Translation: They all saw Twitter cut 80% of its staff and yet is still online.
Is it though? Any time there's a Twitter link, clicking on it has at least a 1/3 chance of seeing "Something went wrong. Try again?".
Twitter as a non critical application can afford to malfunction for a couple of minutes or maybe hours even.
I think they're not understaffed, for now. They're delivering new features and fixing most bugs. A understaffed engineering team usually struggles with that.
One of the orgs that Elon cut the hardest was the trust and safety and spam team. He had strong condemnation for their "suppression" of "free speech".
Maybe he had a point. Maybe he didn't. But what is clear is that spam and fraudulent traffic on Twitter has exploded in the past year, to the point where it's causing serious problems.
To be fair, this is entirely a result of having too many front end developers and needing to find busywork for them. So instead of the tweet data being sent by the server in HTML, you load megabytes of JS that (if the stars align and it doesn’t “go wrong”) will then request the tweet from the server and display it.
I don't experience many problems with Twitter, not visibly more than before the layoffs.
But still, let's assume the reports are true and there was nontrivial reduction in reliability... It was a very extreme engineering cut for a service which is still "generally working". I believe that tech executives are simply assuming that Twitter's decline has a lot more to do with Elon Musk's controversial persona than the service's reliability. While an 80% cut might be too much, they think, a 20% cut would work just fine.
There are so many bugs now but we live with it as it is free.
Also, most of the time, video will not play if you open the post directly. The play button will have no effect.
I mean, that was 100% before Elon took over though, not 1/3.
I understand why this is happening, but the current technical problems of twitter are way, way overstated. Twitter has always been very buggy. It is indeed correct that for the longest time every time you clicked a twitter link and it opened in your browser you had to refresh the window to see it. This was pre-Musk.
https://news.ycombinator.com/item?id=20471601
If this happened now you would see dozens of articles saying that twitter is melting down. But now, it turns out Twitter ran perfectly before! I can't help but scoff.
When public markets rewarded growth, you could let costs balloon and hire teams without worrying about profitability. Now, public markets reward profitability so you need to cut costs. Isn’t it that simple and this is just Zuck’s corporate spin on it?
This is pretty much it from what I see. Stripping back bit of the over growth from 2020-22, leave a bit more cash in the business.
Okay. I hate management more than your average person, but actually I think there's some truth here.
There's a certain organization size at which coordination costs dwarf everything else.
Suppose the following toy model:
New Engineer is the Nth employee.
They add Value of 2, and coordination costs of N^.06.
There will come a point (around 100k employees) where each additional employee reduces productivity.
Better to have 10 organizations of 10k people, than one of 100k, imo.
Didn’t Microsoft disprove that practically with all their divisions warring amongst themselves to the point it cost them the mobile trend?
More than this- people you employ will generate work for themselves. In the process, they will probably also generate work for everyone else, diminishing the total capacity of the company (and possibly, in turn, requiring even more hires).
it's still because of overhiring. Can't trust whatever a CEO of a public company says, there are simply too many stakeholders. There is just less money floating around in couches. Ad spent is down, and will probably go down significantly once AI tools browse the web for me, negating any display ads. A lot of companies with no clear vision are booting employees since the unlimited money train has slowed down.
In my (unpopular) opinion and experience, companies are realizing that workshop / course trained employees who were after tech industry salaries as well as middle management types can be largely trimmed off after post-pandemic growth. I guess you don‘t need as many unmotivated employees / management / DEI types as previously thought.
All of my friends who feel real love for their work and live and breathe tech are still employed or have no problem finding employment. It‘s these people who drive innovation if managed competently and I guess companies want to go back to that. This is not to say that it‘s all fun and roses. A lot of tech employees that love tech in itself work long hours, are stressed and are unable to not think about work at home. I‘m that type of person. Companies really profit of these types.
How are you going to identify the ones that are productive though through a layoff? If you just do a general cut across the board based on 'opinions' how do you know that the ones that are left are the useful ones that will keep you lean?
And then it's the fact that most who see productive people being slashed will ultimately reach the conclusion that productivity isn't the most important but being loud enough is.
Feels like a fine line. But yes, if these companies were bloated then something needed to be done. I'm just curious if "departing with very talented people" is the way to go.
> If you just do a general cut across the board based on 'opinions' how do you know that the ones that are left are the useful ones that will keep you lean?
This is hard. Which is why you identify obvious outliers first. It's much easier to identify obvious slackers and top engineers who sell their soul for your company (again, not a good thing, but for the sake of the argument -- and realism -- we're forgoing ethics here) than it is to identify lower-than-average or higher-than-average employees who are much closer to the median.
Next, a company looking for saving costs would be looking at top-earning employees with a long tenure. There is most likely not a lot of fat to trim here, but the profits could outweigh the risks.
If you're looking to increase productivity and profits only, you'd also have a look at non-value-producing employees, or those who introduce friction. These employees may add to a company's culture by providing equality strategies or acceptance groups in strong economic times, which in turn could also attract more employees with a similar culture fit, but money is scarce now and shareholders want profits, so they must go. I've seen this happen first hand.
However, you are forgetting one thing most people who are productive may not be loud enough to show that they are productive. It's not until they leave that you understand the work they have done.
This becomes even harder if it is top level down that makes the decisions, maybe cutting the manager at the same time. Here, it's impossible to know which has potential, who is running the show and who is doing very little.
We saw this with Twitter, when Elon Musk cut across the entire company and then had to beg people to come back because they realized this after the fact.
In most cases you'd be too stubborn to ask people to come back as it would look bad on you as a leader.
> I guess you don't need as many unmotivated employees / management / DEI types as previously thought. All of my friends who feel real love for their work and live and breathe tech are still employed or have no problem finding employment.
In my circles, those who get offers and those who are still employed are artisans par excellence, of course. No exceptions. Luck and circumstances have nothing to do with it. Others must really be shit or DEI.No. In my circles, those who are still employed are in positions not easily replaced, e.g devops or security. Webdevs and those in game development have suffered the most. As has management.
Efficiency can be seen as doublespeak for 'those who remain must work harder'.
It could well be that some degree of inefficiency is a good price to pay for all the intangibles that make for a great workplace that produces great work and attracts talented people.
For layoffs to not result in employee disillusionment, actual efficiency must be created - e.g. less people can achieve more with similar effort.
The danger is the new wage bill efficiency is actually creating overwork and mounting technical debt that is unsustainable.
The decision makers are rewarded in the short term for seemingly creating 'efficiency' value when in fact they may have doomed their business by destroying institutional knowledge and lynchpin employees that were not measured on the balance sheet.
The delayed effects are business functionality slowly falters, eventually past tipping points, then cascades to irreversible intermittent faliure.
Shareholder value is maximised in the short term and the policy makers leave well rewarded before the negative implications of the decimation are perceived.
The difficult questions for companies are :
- how to layoff the least ( or negatively ) performant employees instead of a random selection,
- how to not have the best employees leave in the wake of layoffs because the layoffs created a culture of fear and uncertainty,
- how to maintain the motivation of remaining employees so that they remain aligned with company goals, especially in light of the now increased workload for those who remain.
Probably the answer is to share ownership and increase reward with those that remain to increase their engagement.
Currently the majority of companies never do this.
Certainly the remaining employees have to, at best, raise the overwork with management as a problem whereas the management see it as efficiency. At worst the employee will have to fight their corner so as prove their workload is now unsustainable. Without proper support, it can be, that the employee must cut corners to keep up and trust relationships can become adverserial.
One would hope these CEOs have real insight into creating efficiency but in some cases the suspicion is that the real issue is upper tiers who have absolutely no idea how their business actually runs on the shop floor.
The wider societal implications are unemployement and a lack of the (perhaps) vital social function the business provided, and the loss of customer faith in the company to deliver as before.
The "employee count = growth" metric has been gamed.
I'm a co-founder of a small startup, and my co-founder keeps telling me that we need to hire more people because (beyond helping with the company's tasks) "the more employees you have, the more valuable the company is" (in the eyes of investors).
I never believed that was the case, am I wrong?
Which is more valuable: a company with a thousand employees that generates 100 million in profit, or a company with 5 employees that generates the same amount? Beyond the question, I understand it's very simplistic and that the value of a company goes far beyond the number of employees, but I'd like to understand how investors view employees.
You can do more with less. The more you introduce the more complicated it will be. Every person will introduce a new dynamic. Focus on creating small, strong and resistant teams instead.
It's changing now that money isn't as free, but basically:
More people = more growth (supposedly) = more money.
> Meta's CEO said more recent layoffs are because companies realized being leaner can make you "more efficient."
So the real reason is the cargo cult Musk started at Twitter. Everyone now wants to proof that they also can keep the lights on with minimal staff.
Which is funny because I’ve been reached out to by two different meta recruiters for swe positions in the past year.