Given the fog of war, it is hard to know exactly how large the carnage is inside Twitter as I write this. The company’s internal FAQ, we can confirm, says that “roughly” half of employees are being ousted by CEO, co-owner, and sole director Elon Musk. That would be a bloodbath with few precedents in tech history: “Roughly” (!) 3,750 people in a single company in a single day.
Musk took to Twitter late Friday to blame “a massive drop in revenue due to [unnamed] activist groups” pressuring advertisers, and claimed that “everyone exited was offered 3 months of severance” (in return for signing what exactly, we don’t know). Earlier reports suggested the severance offer was for one month. Former employees have launched a lawsuit noting a 60-day notice requirement in federal law.
We should caution that Musk is a misinformation maven and noted troll; that “roughly” 50 percent may end up being lower so Musk can look kind by comparison. He’s busy threatening a “thermonuclear name and shame” of former Twitter advertisers; you can’t accuse him of having consistent business logic.
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Here’s what else we should caution. Even the horror of 3,750 firings isn’t much compared to the tech sector as a whole, which has shed (or released plans to shed) 52,000 employees since the beginning of 2022 (here’s the most complete list). Musk can probably boast of having the single largest firing round of the year in tech, but New York’s struggling bike-with-screen seller Peloton has laid off more overall (4,084 since January).
A lot of the tech firings didn’t make Musk-sized headlines, in part because a lot of them were (and are) being carried out carefully and compassionately. But they’re happening nonetheless, and the fog of war is everywhere in tech. Let’s look for trend lines in the major firing incidents prior to Twitter, starting with the murkiest:
Facebook’s parent company, which is ever more tightly controlled by Mark Zuckerberg in the wake of Sheryl Sandberg’s leaving, put as many as 15 percent of its workforce on “Performance Improvement Plans” in October. You may have seen a bunch of headlines suggesting Zuck fired 15 percent of the company; that’s because employees expect the PIPs to lead to their eventual ouster. We don’t know if this is the case, not yet. Zuck may consider it more seemly to cut headcount at the holidays, when fewer people are paying attention to news.
Memo to Elon Musk from your comrade in social media evil: This is how you fire people without risking an instant federal lawsuit.
Meanwhile, Meta has instituted a hiring freeze and rescinded a handful of job offers – not great, but not yet the same as pink slips. It’s worth pointing out Meta has unique troubles (Apple nuked Facebook’s advertising model, Zuckerberg is losing billions on a VR dream his employees don’t understand) that don’t apply to the industry as a whole.
But the industry as a whole is definitely trending the same way. Let’s turn to that ancient bellwether:
Hey, remember the dot-com crash of 2000? That stock market decline, a long time coming thanks to overvalued startups, was sparked by news that an antitrust judge had thrown the book at Microsoft.
Well, the company isn’t nearly as prominent in tech as it was in the Bill Gates era, but it is still out there ahead of market trends. The Redmond, Washington-based company did a “quiet” round of layoffs in October, reportedly in the realm of 1,000 people.
But in an odd coincidence, there’s good news at Microsoft China: That division plans to increase its headcount by 1,000, according to a September announcement. That news came despite China’s generally weak economy and tough new U.S. restrictions on chip imports.
Back in August, the company formerly known as Snapchat announced one of the year’s deepest cuts: Around 1,200 workers, or 20 percent of its total workforce. That wasn’t a surprise, however. Snap may have been a social media icon back in the day, but unlike Twitter and Facebook, it never found a sustainable way to turn a profit.
One of the most telling signs that Snap was circling the drain: Its stock price had already nosedived by around 80%. Quick reminder that Twitter is now private, there is no stock market pressure, and the only reason it can’t turn a profit now is the $13 billion debt that Musk’s buyout forced the company to put on its books.
Musk wasn’t the only one exploding an employment bomb in downtown San Francisco this week. The rideshare company Lyft made a similar move. It laid off nearly 700 people, citing the coming recession. So did a financial tech company called Stripe, laying off another thousand. The cryptocurrency industry meanwhile has shed thousands this year, perhaps more than any other sub-group of tech firms.
We could go on, but let’s stick to the names you know. Intel, which is struggling with slow PC sales and reportedly plans to cut “thousands” of jobs by the end of the year. Musk may have competition yet! Notably, however, we’ve heard of hiring freezes but no major layoffs at major tech giants: Apple, Google and Amazon. (The latter is in fact gearing up for the holiday season by hiring 1,500 workers).
Other layoffs merely suggest a company grew too fast during that period where we were all in COVID lockdowns using their products. Twilio, a business communications platform, said in September it would lay off 900 people – but it also hired more than 4,000 since 2020, so you could call it a post-pandemic correction if there weren’t, y’know, actual human livelihoods involved.
Hiring and firing in the tech world beyond the U.S. seems to be offering the same mixed message. Ottawa-based Shopify also rapidly expanded during the pandemic; now it’s slashing 10 percent, or 1,000 employees. Australian business software giant Atlassian is currently trying to hire exactly the same number of people; maybe these Commonwealth countries can work on some kind of exchange.
In short, the trend is that there is no trend — not yet, anyway. Tech companies are hunkering down in general, but some are better placed than others. It’s almost as if the tech industry 20 years after the dot-com crash is vast and nuanced, with an incredible range of services and opportunities.
And that leaves Elon Musk with even less excuse for his precipitous pink slips.