The staff layoffs instigated by Elon Musk after his acquisition of Twitter in October have sent tremors throughout the tech industry. The move has attracted veneration from other industry leaders including the formidable Mark Zuckerberg, who is considering similar job cuts at Meta.
Twitter Layoffs and Why They Are Trending
A few months ago, Tesla and SpaceX CEO Elon Musk took to his Twitter account to announce massive layoffs within the social media giant.
In his November 5 Twitter post, Elon Musk defended the mass layoff he was making at the company saying:
“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.“
The billionaire CEO added that every employee laid off “was offered 3 months of severance, which is 50% more than legally required.”
The tweet surprised many since Twitter had been on an upward trajectory in popularity among social media companies. Musk, however, indicated that the company was making losses and he needed a more streamlined and efficient workforce to drive the company’s earnings effectively.
In response to Musk’s decision to layoffs, rumors emerged that Zuckerberg was considering a similar move for Meta.
In the “The Lex Fridman Podcast,” posted on June 8, 2023, Zuckerberg dropped a bombshell by supporting Musk’s actions setting the trend to run the industry.
During the interview, Zuckerberg appeared to laud Musk for taking bold steps to “make Twitter a lot leaner” adding, “I think that those were generally good changes.”
As the discussion was steaming up in the podcast, the Meta CEO gave his personal opinion by saying:
“I also think that it was probably good for the industry that he made those changes because my sense is that there were a lot of other people who thought that those were good changes but who may have been a little shy about doing them.”
In a reaction to Zuckerberg, the press responded by posting tweets that caused panic in the industry, suggesting that more layoffs were looming.
Mark Zuckerberg believes that Elon Musk kicked off a trend that’s been “good for the industry.” https://t.co/39vAqIJymB
— FORTUNE (@FortuneMagazine) June 9, 2023
Although the Meta CEO has not provided any statement concerning future layoffs lately, close sources indicate that discussions are potentially in the final stages to further streamline Meta’s workforce.
When Fridman asked about the reasons for earlier layoffs, Zuckerberg explained that Meta focuses on higher-quality projects with a desire to have a slimmer structure between the tech giant’s top management and product line producers.
“We have a desire to empower engineers and ensure that there is no eight degrees of management.”
Looking back to March before the latest layoffs, Zuckerberg circulated a company-wide memo that read in part:
“Over the next couple of months, org leaders will announce restructuring plans focused on flattening our org, canceling lower priority projects, and reducing our hiring rates. With less hiring, I’ve made the difficult decision to reduce the size of our recruiting team further.”
This memo and the preceding discussions with Fridman about further firings have made some reconsider the Twitter layoffs and the trend of over-hiring in the tech world.
In a further analysis of the potential reasons behind the recent trend of layoffs, it is evident that tech CEOs are finally taking a look at over-hiring and potential solutions for it.
When companies develop very fast, they over-hire, creating bulky, bureaucratic divisions that hinder innovation and slow down decision-making.
In addition, companies in the tech industry need sustainable and profitable business models, increasing pressure on management to remain dynamic in operational decisions.
Impact of Twitter Layoffs on Employees and the Industry
After Zuckerberg’s remarks, there are speculations of further layoffs from tech companies as they move to slim their workforces. This would lead to job insecurity and diminished morale among the employees, changing the perception of previously stable, paying jobs in the tech industry.
The trend initiated by Musk sets precedence for more companies to rethink their staff profiles. This clears the path for more layoffs putting many companies into the boardroom to reevaluate their workforce and consider taking similar steps.
In the unlikely event, further layoffs will lead to a ripple effect across the tech industry, adding to already ballooning unemployment levels.
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