Elon Musk is moving closer to closing his deal for Twitter’s acquisition. However, reports suggest that mass layoffs could occur with 1,000 or more of Twitter’s 7,500 employees.
The company may become more efficient in the near term.
Musk did announce plans to raise Twitter’s total employee count to over 11,000. This wouldn’t be Musk’s first major wave of hires.
Statista.com data shows that Twitter only had eight employees as of January 2008. This number rose to 29 in 2008 and 130 in 2010. Then, in 2010, Twitter’s workforce grew to more than 350. By December 2013, there were 2,712 employees, and Twitter saw the numbers steadily increase – with a few dips – over the past decade.
From 5,500 at the December 2020 end, to 7,500 by December 2018, it has increased its workforce.
Twitter’s steady growth is a problem. It has fewer employees than Facebook (71,970 employees in December 2021, an increase of 150 employees in 2006); and only a small fraction of Amazon’s workforce, with 1,608,000 employees.
Musk has approximately 70,000 employees at Tesla. Twitter, therefore, would remain a relatively “boutique” operation once all is said and done.
What are the Cuts?
A new owner of a publicly traded company is not likely to try streamlining. Musk may be being candid.
Rob Enderle from the Enderle Group said that it was generally bad form to notify a layoff without doing due diligence. This is because you don’t know what you have, and can therefore not yet tell if your staff is sufficient or inadequate to do what is needed.
Enderle said, “An announcement such as this places your top performers on notice, and given current job markets, they may now depart preemptively before it is possible to put them under retention plans.” Enderle said that the purchase of Musk could have further crippled his efforts to save the company. The inexperience of this man when it comes down to acquiring a company is shocking.
What does everyone do?
Although Twitter has experienced a huge user growth ever since its inception, it hasn’t made any significant changes to its business model despite the fact that it has had an exponentially growing employee base. That is very much par for the course in the tech world, yet a question could still be asked, what do all those 7,500 employees do exactly – and how would layoffs following hiring additional people make the company run better?
Twitter’s acquisition of Twitter has led to some uncertainty about what the future holds for the company. It is common for people to communicate back and forth in an attempt to confuse, scaremonger or soothe what may really be happening. Jim Purtilo (associate professor of computer sciences at the University of Maryland) stated that he does not believe there are any large layoffs.
“I’m not aware that Twitter has 7,500 employees. Purtilo said, “To be clear, it is rare for companies to compare with it.” Twitter is a unique company. It could include the thousands of people responsible for managing sales, content moderating and other tasks. Are those numbers big or small? “We don’t often know.”
Musk suggested that Twitter would like to see $26.4 billion in annual revenues by 2028. This is an increase from the $5 billion last year. However, advertising, which currently accounts for about 90 percent of the platforms revenue, would fall to 45 percent – yet still generate about $12 billion. Another $10 billion is expected from subscriptions.
Purtilo said, “A discussion about the employee base comes into play when talking about net profits and this company has probably lagged behind top-tier tech companies.”
The bottom line is that they make money, but not in the same way as Amazon or Google. Why? Purtilo explained that, regardless of the jobs they do, there hasn’t been any corporate overhaul to keep operations running lean.” Maybe some bloat might have settled in, keeping it comfy instead of being aggressive. Are there any changes that could boost their profits? We will be watching this closely. Although most of the media focus on this issue through political lenses, I think the ultimate driver for change is the bottom line.