Another ax day at Twitter. Elon Musk fired at least 200 employees last weekend, writes The New York Times. Among the layoffs also some high profiles. ‘The house will not immediately collapse, although it is gradually starting to crumble’, says Tom Evens, professor of media industries (UGent).
Another 200 people gone: in a year, Musk sent half of Twitter out of the way. Why does he do that?
“I see two reasons. The first reason fits into a global trend of layoffs. Amazon, Netflix, Facebook, jobs are lost at all major tech companies. Twitter is highly dependent on advertising, but those revenues are under enormous pressure due to the poor economic conditions. Even a platform with 450 million users is losing advertisers due to the poor macroeconomic environment; they too are not immune. When revenues fall, so should costs: that’s a logical explanation. Twitter was already unprofitable when Musk bought it for $44 billion, but now that advertising revenues are also falling, he’s starting to hit the mark. It seems like arbitrariness reigns.
“That brings us to the second pillar. Elon Musk has a big ego. After the entire takeover process, he is now trying to bend the company to his will. Musk wants to show that he is in charge by, for example, firing entire teams and hiring them again the next day. New bosses, new laws, but with other tech giants, savings or acquisitions are much less rash.”
He also fired Esther Crawford, the woman behind the paying service Twitter Blue. Can that project now go in the trash?
“Twitter Blue was an idea where people could purchase the well-known blue authenticity checkmark for 3 euros per month. The plan had only existed for a few months and now they’re already canceling it. That is symbolic of Musk’s trajectory at Twitter. However, it’s not a bad idea to charge people for extra features like the blue check mark. Facebook and Instagram are hatching similar plans.
“But Twitter Blue was simply rolled out incorrectly. Musk wanted to eliminate fake profiles, but that system just gives them extra chances because they can buy a checkmark that way. So yes, it failed miserably. Another idea from Musk that doesn’t work. Twitter is burning, and people are just extinguishing it.”
People who develop new features and engineers who keep the platform online were also laid off. Should we start fearing the functionality of Twitter?
“That fear has been around for a few months among experts. The house will not collapse immediately, but it will gradually begin to crumble. Certain things can eventually go wrong after all those layoffs: just think of tweets that do not load properly, images that are not visible, posts that upload slowly, and so on. I’m not saying it will all happen for sure, but the chance is real. They also have to pay attention to safety. If Twitter were to cut back on cybersecurity as well, the game would be ruined very quickly. And then we’re all in trouble.”
Can Elon Musk still save the Twitter house?
“Musk achieved amazing results all around. Paypal, Tesla, SpaceX: what he does and did there was unseen and formidable. But all those ventures were visionary ideas. Twitter, on the other hand, was an acquisition of an existing structure. And I’m afraid his quality is in developing ideas, not running a company. He needs to find a tight leader who implements the right processes. So it is mainly about hiring the right people, not firing them as he is doing now.”