Source: Elon Musk plans to lay off 25% of Twitter's workforce in the coming days, focusing on sales, product, engineering, legal, and trust and safety

The first round of layoffs, led by his lawyer Alex Spiro, will target 25 percent of the workforce — SAN FRANCISCO …

Washington Post 2022-10-31

Context & Ripple Effects

Twitter had already cut about 30% of its talent-acquisition team amid business pressure and uncertainty over Musk's takeover. Internal planning had also contemplated a far deeper workforce reduction if the acquisition closed, versus a payroll-cutting plan if it did not: the takeover contingency plans made broad retrenchment central to either path.

The reported reduction reaches beyond recruiting into the functions that sell, build, govern and police the service. That makes it consequential not merely as a headcount measure, but as a reset of Twitter's operating capacity under its new owner.

First-order effects

Twitter's sales, product, engineering, legal, and trust-and-safety teams face immediate staffing losses, with Alex Spiro reportedly leading the first round.
The earlier talent-acquisition reduction is followed by cuts to the teams responsible for core platform operations, narrowing Twitter's internal capacity across both revenue and oversight.

Second-order effects

Advertisers and other commercial customers may face less support from a smaller sales organization while product and engineering teams are simultaneously expected to maintain the service.
Reducing trust-and-safety and legal staffing puts greater operational weight on the remaining teams to handle platform enforcement and related governance work.

Third-order effects

The reported plan fits an owner-led cost reset in which Twitter's staffing model is reshaped rapidly after a change in control, rather than through isolated recruiting cuts.
If successive cuts continue across revenue, engineering, and safety functions—as later reporting described in a planned reduction of roughly half the workforce—Twitter's competitive position will depend increasingly on whether a much smaller organization can sustain both monetization and platform governance.

The trend: Twitter is becoming a case study in post-acquisition restructuring that compresses operating costs across product, revenue, and trust functions at once.

Discussion

@mikeisaac Rat King on x
so my understanding is at twitter HQ, the folks running things in the “war room” are Musk, David Sacks, Jason Calacanis (VCs/Elon pals) Sriram Krishnan (exTwitter/current a16z), Elon's legal and finance head guys (Spiro, Birchall) and a fleet of Tesla/BoringCo engineers
@elonmusk Elon Musk on x
@ericuman This is false
@taylorleese @taylorleese on x
@thinkingfish The ongoing layoff process is a complete farce and an embarrassment. It's a bunch of Tesla goons making decisions about people they know nothing about other that number of code commits. It's complete absurdity.
@caspiancey @caspiancey on x
So for clarity, the free speech platform of choice for the greater public, the “town square” now relies on: • the richest man in the world • the Saudis • CZ • a16z • The All In Podcast We're absolutely fucked.
@ericuman Eric Umansky on x
What a guy. @elonmusk is making sure to fire people at Twitter before part of their year-end compensation *kicks in on Tuesday.* https://www.nytimes.com/... https://twitter.com/...
@massawyrm @massawyrm on x
12 Years ago DIGG was the leading social media site and the chief driver of traffic outside of search engines. After one monetization driven redesign, the site collapsed overnight as the userbase fled. Within a week it was dead as anyone knew it. It can and does happen that fast.
@daveyalba Davey Alba on x
Elon has singled out one of his own employees now... and there's even more pressure now from his fans to “clean house,” starting with Yoel Roth, “or nothing will really change.” https://twitter.com/...
@shiraovide Shira Ovide on x
https://www.washingtonpost.com/ ... https://twitter.com/...
@gergelyorosz Gergely Orosz on x
Are there any women in the room that calls all the shots on how Twitter will operate, going forward? https://twitter.com/...
@faizsays Faiz Siddiqui on x
Inside Elon Musk's Twitter, Musk's lawyer Alex Spiro is overseeing initial phases of the takeover. Tesla engineers reviewing code, even though the automaker doesn't run the type of distributed systems of a large social media network. Comms are nonexistent. https://www.washingtonp…
@johnhawkinsrwn John Hawkins on x
Actually, complete absurdity is publicly trashing your new boss over and over again on the social media network he just bought and then complaining that it's absurd you just got fired. Of course, you did. What else did you expect? What else did you deserve? https://twitter.com/..…
@amandarivkin Amanda Rivkin on x
“Longtime Musk associates David Sacks and Jason Calcanis appeared in a company directory over the weekend, according to photos obtained by The Washington Post.” https://www.washingtonpost.com/ ...
@kylesouther1 @kylesouther1 on x
25% holy shit https://twitter.com/...
@washingtonpost @washingtonpost on x
Members of Elon Musk's inner circle huddled with Twitter's remaining senior executives throughout the weekend, conducting detailed discussions regarding the site's approach to content moderation, as well as plans to lay off 25 percent of the workforce. https://www.washingtonpost.…
@taylorleese @taylorleese on x
Welp, I just got fired from this bird app ya'll. It's been grand.
@teddyschleifer Teddy Schleifer on x
Good @MsHannahMurphy led TikTok on an unanswered question of the whole Elon deal saga — why did he pay $54.20 and not just try to negotiate a lower price during the legal wrangling of the last few months? https://www.ft.com/...
@bruceqburke Bruce Burke on x
🧐 Members of billionaire @ElonMusk's inner circle huddled with @Twitter's remaining senior executives throughout the weekend, conducting detailed discussions regarding site's approach to content moderation, as well as plans to lay off 25% of workforce. 🫠 https://www.washingtonpos…
@jdcmedlock James Medlock on x
https://twitter.com/... https://twitter.com/...
@mmasnick Mike Masnick on x
Firing people based on code commits and nothing else seems even dumber than the typical BCG/McKinsey consultant “who should we layoff” type of nonsense. https://twitter.com/...
@shannonpareil Shannon Bond on x
“We didn't know when we would close on Thursday night until 15 minutes before it happened,” said one Twitter adviser." https://www.ft.com/...
@davidheniguk David Henig on x
Address concern over the number of ‘real users’ of twitter by charging the ones previously deemed the most important... https://www.ft.com/...
@grady_booch Grady Booch on x
If these are your company's hard core software engineering metrics... Then: number of source lines of code produced Now: number of code commits https://twitter.com/... https://twitter.com/...
@sriramk Sriram Krishnan on x
Now that the word is out: I'm helping out @elonmusk with Twitter temporarily with some other great people. I ( and a16z) believe this is a hugely important company and can have great impact on the world and Elon is the person to make it happen. https://twitter.com/...
@alexeheath Alex Heath on x
Elon Musk is moving quickly to change Twitter from the inside out. On his first day as its new owner, he told employees to change what logged out users see when they visit Twitter's homepage. Within a few hours, it was changed to the Explore page. https://www.theverge.com/...
@nickrw @nickrw on x
Theory of what's going to happen next at [CHIRPBIRDICON] 1. Musk lays off very significant proportion of perm employees. We're too expensive to keep on, having RSUs that converted to vesting cash at $54.20 when the deal closed.
@alexeheath Alex Heath on x
Musk's request Friday required VP involvement to override a code freeze that is in place to thwart employees from making changes. He has quickly started wading into things like copy, also requesting that “Super Follows” be renamed to “Subscriptions” in a rushed app update.
@joshelman Josh Elman on x
Changing the logged out home page of Twitter to show more content is likely one of those “easy fixes” that has symbolic effect but very little to no metrics effect. I ran A/B tests on this in 2010. Usually the best way to grow Twitter active users is make people sign up first htt…
@goldman Jason Goldman on x
To recap: Jack knifed his hand picked successor to anoint Elon the “sole solution” and now all the executives who ran the company for Jack are getting screwed out of their comp and Elon's going to fire half the company over a weekend to prevent them from hitting their cliffs.
@bendreyfuss Ben Dreyfuss on x
Remember the time in 2010 when Jason Calacanis accidentally didn't use bcc for his massive email list so me and 23,000 other people were caught in a “reply all” from hell? https://techcrunch.com/... https://twitter.com/...
@tomwarren Tom Warren on x
this seems really minor, but it's super interesting. Musk's first changes to Twitter improve the UX for new users https://twitter.com/... https://twitter.com/...
@nycsouthpaw @nycsouthpaw on x
Noble of David Sacks to take time away from undermining Ukraine to help undermine Twitter's continued viability. https://twitter.com/...
@can @can on x
Super Pumped Season 3 confirmed https://twitter.com/...
@sarafischer Sara Fischer on x
—Musk inner circle has been at HQ helping Musk assess teams, layoffs —Some, including David Sacks, Jason Calacanis, Tesla engineers, are listed as contractors in Twitters internal system & have Twitter email addresses assigned —Sacks says its not full-time https://www.axios.com/.…
@goldman Jason Goldman on x
So any women or just nah? https://twitter.com/...
@broderick Ryan Broderick on x
I 100% believe this crowd realized a truth that has been hiding in plain sight the whole time: the blue verification checkmark is the ultimate NFT https://twitter.com/...
@carnage4life Dare Obasanjo on x
An important aspect of A/B tests is the hypothesis to go along with the test and results. Intuitively and based on examples like YouTube & Reddit, showing people popular public content creates more engagement than a dead end sign up form. The question is why Twitter's different? …
@dansaltzstein Dan Saltzstein on x
I am not a lawyer or a law specialist, but this sounds like a field day for lawsuits. My understanding is that “for cause” is a pretty high bar. https://twitter.com/...
@noahpinion Noah Smith on x
Sriram is someone I trust to give great advice! 👊👊👊 https://twitter.com/...
@jimmyjazz1968 Gore Vidal Sassoon on x
Come on, lmao https://twitter.com/...
@scottnover Scott Nover on x
I don't think Elon Musk realizes how much money he's going to lose on Twitter at this rate.
@jimmyjazz1968 Gore Vidal Sassoon on x
I'm just some dude, but it is IMPOSSIBLE to even break even on this site with that kind of debt. And that was BEFORE huge increases in interest rates and a global recession. It is not IF but WHEN Twitter is sold at a massive loss https://www.nytimes.com/... https://twitter.com/..…
@obrien Chris O'Brien on x
Bottom line: Twitter now must make $1bn in interest payments on the debt that Musk saddled the company with. The company has rarely turned a profit in its history and doesn't generate enough cash. So he has to slash expenses (layoffs) and generate new income (user fees) asap.
@dasvee @dasvee on x
Interest on debt used to buy twitter= $1 billion a year. Cash generation last year: $630 million Musk has to find an extra $370million per year profit to break even. That's a 58% increase in profit. https://www.nytimes.com/... https://twitter.com/...
@ncweaver Nicholas Weaver on x
Twitter he just literally lit $40B of his own money on fire, either as his direct cash contribution (about half), or debt that he is undoubtedly personally liable for (the other half), and is doing his best to crater the value as quickly as possible.
@obrien Chris O'Brien on x
People will analyze Musk's move through the lens of ideology and politics (and his idiocy). But fundamentally, he made a bad business deal, and now his back is up against the wall. Good breakdown here: https://www.nytimes.com/... https://twitter.com/...
@film_girl Chriscreama Warren on x
Labor attorneys please explain to me how Elon could do mass layoffs before vesting dates without filing WARN notices with the feds or the state? I've checked the data and there is nothing filed in California, New York or Washington states and the law is pretty clear on this.
@gartmartin9 Art Martin on x
@RonFilipkowski NYT is reporting that Musk is trying to stiff them on the severance..(let the litigation begin...) https://www.nytimes.com/...
@clarajeffery Clara Jeffery on x
The economics Musk faces are brutal/of his own making https://twitter.com/...
@allanbell247 Allan Bell on x
This is why I wouldn't concern yourself about any monthly charge “reports.” 15% of Twitter users make up 80+% of content ($) and trust me, other platforms will pay to have them in full. Nothing will come of it, Elon throws temper tantrums often and doesn't follow through. https:/…
@russbengtson @russbengtson on x
he should charge you guys a billion dollars a year to keep posting https://twitter.com/...
@carnage4life Dare Obasanjo on x
This is either going to be the most amazing turnaround in business history or the most amazing hubris driven train wreck ever. Either way, it's going to be an entertaining ride for Twitter watchers.
@ncweaver Nicholas Weaver on x
I'd bet money that, in 5 years, @elonmusk will have to declare personal bankruptcy. Its not 100%, but it is certainly non-trivial odds. Why? Because his assets are inflated but his debts are very real...
@matthew_d_green Matthew Green on x
Folks. I don't know how to say this, but: I'm starting to think Elon Musk might not be a very good businessman.
@laurenshirsch Lauren Hirsch on x
I took a look at the numbers behind the largest tech LBO ever. They're tough to make work. https://www.nytimes.com/...
@carnage4life Dare Obasanjo on x
Twitter posted a net loss of $221 million in 2021, which is better than the $1.1 billion loss it reported in 2020. Twitter now needs to pay $1 billion/year in interest payments for the money used to acquire it. That's going to be quite the magic trick. https://www.nytimes.com/...
@traskjd John-Daniel Trask on x
Not a magic trick if you can read a profit and loss statement. Twitters salary expenses are astronomical. https://twitter.com/...
@briantashman Brian Tashman on x
Musk says he has amazing, secret plans to make Twitter more successful... but also wants to cut workforce dramatically, so there will be few people to create new tools, and doesn't have much money to work with since it's mostly going towards servicing debt https://www.nytimes.com…
@nytimes @nytimes on x
Elon Musk faces financial challenges in owning Twitter. The site frequently loses money and took on $13 billion in debt for the blockbuster deal. If the financial case is grim, any investment plans may have to take a back seat to simply paying the bills. https://www.nytimes.com/.…
@sindap Sujeet Indap on x
The youngest associate and paralegal at WLRK had the assignment of tracking and explaining Elon's most esoteric memes to the partners: https://www.ft.com/... https://twitter.com/...
@marioescribano_ Mario Escribano on x
LOL. “At Twitter's law firm, Wachtell Lipton, junior lawyers became “meme-splainers” to their senior colleagues, deciphering Musk's esoteric Internet postings and finding ways to use some of them — including an emoji of a pile of poo — against him”. https://www.ft.com/...
@matt_levine Matt Levine on x
the first-year associate who explained how to type the poop emoji into the brief was instantly made a partner https://twitter.com/...
@mroliverbarnes Oliver Barnes on x
One person involved in the debt financing described the due diligence on the deal as “easy”, because “there was none”. https://www.ft.com/...

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