Given the amount of staff cuts at Twitter, you would think that it must be close the brink at this stage, right?
To recap, when Elon Musk took over Twitter in October last year, the company had around 7,500 staff, along with a range of contractors in various moderation centers around the world. As a first order of business, Musk went about culling roles, reportedly cutting 50% of staff in early November, followed by more reductions and rationalizations, which included slashing contract staff in the thousands as well.
That seems drastic – say what you want about Silicon Valley excess, but surely losing more than 5,000 staff has to have an impact.
But Twitter is still running. Sure, there have been some hiccups along the way, and things aren’t running as smoothly as they should. But they are still running, and that, apparently, has emboldened Musk and Co. to cut even more staff over the weekend, with Twitter 2.0 reportedly eliminating another 50 roles, including Musk loyalists and various engineers.
The most surprising was Twitter Payments chief Esther Crawford, who has been an active supporter of Musk’s reformations at the app. Crawford now joins the long list of former Twitter staff moving on from the company, which continues to fly closer and closer to the sun, in line with Musk’s high stakes management style.
Will that lead to big trouble?
Again, it hasn’t yet. If Twitter were to suffer a major outage, nobody would be surprised, but for the most part, Musk’s cost reduction efforts haven’t resulted in a massive collapse, even when he’s unplugged servers and removed what was deemed to be critical oversight.
That could still happen, of course, but at the same time, Musk’s reductions have significantly reduced Twitter’s costs, which it needs to do in order to get back to neutral footing, and look ahead to a revenue-positive future.
Twitter’s staff costs in Q2 ’22, its last full report before Elon took over, were $950 million. We don’t know exactly how much Elon has reduced this, as a cost impact, but let’s say Elon’s cuts have reduced Twitter’s staff costs by 80%, factoring in the removal of execs on higher salaries, etc. That would bring that down to around $190 million – and with ad revenue reportedly in decline, Twitter needs to keep culling, in line with reduced intake.
Basically, for every lower-than-expected revenue figure that comes in, Twitter will need to reconsider its costs, and with Twitter Blue not seeing huge uptake, and Elon seemingly unhappy with Twitter’s revenue stats, it’s not surprising to see more staff cuts at the company.
The question is, how many cuts can Twitter take? Every time, it seems like Twitter’s gone too far – surely there can’t be any more superfluous staff remaining at the app.
But it keeps on going. Which either means that social platforms are radically overstaffed, or Twitter’s set to crash any time soon.
Maybe a bit of both. We’ll find out, as Twitter continues to revamp its structure, and cut roles to save dollars.