6 months ago it was all painted (maybe seemingly, though, by prior executives who weren't speaking for Musk) as if this wouldn't be a big deal for employees, which to me makes this idea that people are being rapidly fired "for cause" after a suddenly-imposed weekend work shift deadline extra shitty :/. (Even if I do sometimes claim that Twitter is incompetent as an organization or bloated with idle staff, these are humans that deserve some basic respect with how they handle a transition plan.)
> At the meeting with employees on Monday [April 25], executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
So, really those two long sentences should be rewritten:
Mr Agrawal, as an officer of the company, engaged in rampant speculation, perhaps to reassure employees (or himself) that their jobs were safe for three months to a year, even though Mr. Musk had repeatedly indicated otherwise.
I think he would have known he was out the door since part of the reason Musk was saying he was buying Twitter in text messages was that he thought Agrawal wasn't up to the job. With a 52 million payout, I also think he wasn't overly worried about how he would do after Twitter.
Tesla is currently engaged in litigation over allegedly firing employees without providing necessary 60 day notice period under California law, denying them pay as a result, so it would appear that Musk has precedent.
How many devs at twitter have no code to show for the past month, because they swept up by the impending doom of Musk's takeover and stopped working? I would guess more than a few. Firing those "for cause" will probably be easy; they stopped working for a month and anybody can get fired for that.
Those that remained productive will probably have better prospects for keeping their jobs, and for suing if they're fired.
Lawsuits are often free financing to fractional future payouts. Especially when the terms are too cush from being clubby. That's like half of Elon's call on this bet.
>Firing 25% of the workforce "for cause" looks like a very hard sell to me
Why would this be? Musk has already signaled his lack of confidence in the previous management, why would this not extend to their hiring practices, training, HR policies, etc.?
Those being laid off for cause are the 3 senior level executives (the old CEO, the lead counsel, and the content policy head). Those 3 had a 100+ million cumulative severance package which they are now no longer eligible to receive, although none of them are strapped for cash.
Elsewhere in this thread, people are discussing a potentially-credible (but maybe you disagree) report on this from Gergely Orosz that does not paint this as "only the 3 senior executives".
> I talked with an engineering manager who was at Twitter for 5+ years, and got laid off on Sunday "for cause". They were too exhausted from working over the weekend to talk longer: they first need to sleep.
Musk doesn't meet the cause outlined in their employment contracts. They'll get their executive early termination severance but it'll require some legal action first.
Taylor Leese is a respected Twitter engineering manager who tweeted on Sunday that he was no longer working at Twitter. While it's remotely conceivable that he quit, it's much more likely he was fired.
I had reports from friends who worked there that they were asked to stay available over the weekend, presumably for situations like this, or requests from the "war room" group that has been setup.
Does this mean that they have or deserve different rights under contract law than others do? What if their counterparty is even less "strapped for cash"?
Matt Levine has a good explanation (https://www.bloomberg.com/opinion/articles/2022-10-31/elon-m...), which is that they receive a golden parachute for a simple reason. Their self-interest was to say "la-la-la, we can't hear you" when Musk comes trying to buy Twitter. That would've given them a chance to maintain high paid positions for years. Instead, they sold to him, knowing they'd probably be given the boot.
Now, at some level, it still stinks that the CEO is getting paid so many tens of millions of dollars for less than a year's worth of work. To solve that, you'd have to cut CEO pay in the first place, because just removing the parachute would incentivize clinging to their existing paychecks.
The senior management who were fired "for cause" are all examples of how golden parachutes are properly used, and they all performed to the highest possible standard: They delivered a full-price payout to shareholders.
The "for cause" bit is a transparently vindictive breach of contract. They will get their money and then some. In fact they may know some lawyers who know how to take Elon's money.
You also need to give two months notice, or compensate for two months time, if you're going to have a big layoff. Laying off 50% of employees is also going to add up. 3,500 employees * $20,000 = $70,000,000.
I've been through changes like this several times and the SURE indicator that big changes are coming is when the higher-ups say "Nothing will change". Seriously.
I actually think that, below the CEO level, the managers are engaged in wishful thinking, rather than deceit.
My guess is Musk wants to punish them for making him go through with the deal _he agreed to_. He doesn't want to own Twitter and he's making them feel it.
>He requested that logged out users visiting Twitter.com be redirected to the Explore page that shows trending tweets and news stories, according to employees familiar with the matter who requested anonymity to speak without the company’s permission. Before, visiting Twitter’s homepage while logged out showed only a sign-up form,
> 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
Reddit and Instagram is even worse. Besides cookie boxes (which all have different UIs and rarely a good no button) it's probably the most annoying thing on an ad-blocked internet.
How do the designers who work at these tech companies not understand that repeatedly annoying non-user visitors doesn't make them want to sign up? Nor incentivize others to link to it?
I looked at Musk's feed and it did not appear, but just now clicked on one of the other Twitter links in this thread and got hit with it almost immediately. Maybe the change is still being rolled out? Maybe it was just a fluke? Maybe it doesn't appear on certain people's feeds for one reason or another?
Prolly not pushed to your local edge location, my version of twitter updated and it no longer shows the pop up screen yet it still shows the blue bar at the bottom of the page (which is fine imo)
I’m sure they crunched the numbers and found that the gain from targeted ads toward the people that sign up is bigger than the loss of people who don’t use Twitter because of the annoyance. Instagram is even worse for what it’s worth.
It seems inconsistent now. Sometimes I can scroll for minutes with nothing and other times I get the sign-up pop up right away. Or was it always this way?
it's gotten worse for me. i can't access it. in a browser that's always logged in, i try to visit any page on the site and get a page that says "Something went wrong, but don't fret — let's give it another shot."
the site works whenever i login via a fresh, private browser session. for a minute i thought i was blocked after muting the words "elon" and "musk"
I had that yesterday in Safari - clearing all the caches and closing every Twitter tab (I somehow had 5 open) meant that it worked when I opened a new one. Maybe something Service Worker-y? Have had that issue with the Twitter before.
So, it was a simple corporate raid after all. Welcome back to the 70s: energy markets problems, inflation, and now finally some good old corporate raiding with LBOs.
Twitter has been taken private so this is not corporate raid.
Corporate raid is aimed at making changes to the company specifically to increase share price. The idea is that the resulting share price increase covers at least significant part of the cost of getting majority stake. This makes the buyout relatively cheap or even free.
Which of course makes little sense if you are also taking the company private.
I would also like to point out that the whole point of buying a controlling stake in the company usually is to exert some control. And to buy it out completely and take it private is to exert complete control without having to explain yourself (too much).
There is, of course, possibility of the investor buying shares because they are content with current management and do not plan to interfere even after they have acquired majority stake. But this, in my experience, is quite rare.
Taking a company private via LBO, firing a quarter of the staff so you can afford the debt payments, and then streamlining and flipping the profitable parts of the business is the classic corporate raid playbook. So far he's done the LBO part, and is apparently doing the layoff part. Of course, he's the richest person in the world and his finance partners are well connected Saudis, so there are obviously many plausible reasons to operate it at a loss and never do the actual looting part of the corporate raid.
No idea if it’ll turn out to be just a corporate raid but I’ve become so disillusioned and disgusted with nearly everything about companies like Twitter, Google, and Meta that I do not think a realistic solution exists for the problems they cause that doesn’t involve a complete change of leadership and firing a significant percentage of all of them.
I don’t care what Elon does with Twitter tbh, as long as it’s something different. Good luck to him.
Raids are typically distressed companies that are squeezed for every asset and sold for parts. Not buying a thriving enterprise and driving into the ground. He paid a premium for Twitter and is probably $10B in the hole already. This has to be a sincere attempt to increase profitability. Just seems like a really bad one. Conspiracy theory is that owns a wad of that Truth Social SPAC and every dollar he drains from Twitter goes there.
Elon wanted to back out and the executives finessed him masterfully. Everyone with vested shares is a recipient of a $44,000,000,000 cash infusion into the bay area economy, while media stupidly focuses on cliffs and parachutes that wont be paid.
I'm all for the European don't work unpaid overtime, but what I don't get is the sense of entitlement these people had, when they were threatening to leave in advance and then decided they'd rather just stay in their cushy jobs in the hopes that Musk would change his mind. "WE WILL SHOW YOU ELON" - Show what exactly? That billing and other completely standard cookiecutter SaaS features can't be implemented by other engineers for what is ultimately a near real-time messaging platform with marketing hooks.
Everything in this story is a complete mess. The acquirer, his attitude towards workers, the entitlement and complete delusion of the workers and even more than that the misleading of the public AND the workers of the previous arguably failed management, along with their belief that they are the ultimate gatekeepers of truth in this world.
I'm not sure what deeper societal lesson this whole thing entails, but it definitely in part shows two societies, both of which are completely detached from the normal hardships an average human on this planet has to go through.
The pitfalls of extreme comfort. You have a place like the Bay Area with near perfect weather, obscene amounts of money, and at least until relatively recently, a social environment that lorded you as a "rockstar."
You look at your bank account and think "yeah, I AM a Rockstar! I DO deserve this! Everybody wants to be ME!"
Rinse and repeat that general attitude for ten years or so and blammo (which is even more explosive considering large chunks of the millennial generation were already coddled—and yes, I'm a millennial). You get a bunch of entitled brats who view anyone who isn't doing what they're doing as _less than_ (which is ironic considering those "less-thans" keep the bubble they live in running—electricity, food delivery, sewage systems, etc).
Pepper in the absolutely psychotic, cult-level diatribe these people sputter about "changing the world" and "making dents" and you have a low-level Jim Jones field jamboree brewing. It's absolutely zero surprise what's come out of SV over the last decade and change.
And that doesn't even factor in the pharmaceuticals!
> they were threatening to leave in advance and then decided they'd rather just stay in their cushy jobs in the hopes that Musk would change his mind.
I imagine that at this point, many are staying until they get fired so they can collect severance pay.
That is what I would do. I absolutely would not work for Elon’s Twitter long term unless they paid me a king’s ransom, but I would definitely stick around and jump through the hoops just long enough to get a nice payout.
You’re almost there - which systemic problems in society are creating this elysium like class system where we jeer about the battles of the ascendant elite vs the shrinking bourgeois in a city where people beg for water on the street?
"Workers" is strange to me when talking about people who make 5-10x the national average (i.e. make more than many average executives in other industries). They're employees, but "workers" implies blue collar in my opinion. I'm fine with including staff in retail, restaurants etc, but someone making $500k+ a year doesn't fit into that category.
Most of the national/international media has been scrutinizing Twitter all weekend, specifically looking for signs of layoffs. It seems odd that this person would have scooped them all on that? Not saying it's impossible or anything, but it does make me a little suspicious.
Not that I'd say use them as the only source but they've been a source for other layoffs for a long time and he's usually correct if not always. He's the author of a few Engineering books (The Pragmatic Engineer, etc.) so he gets a lot of inside information from current and past SWEs.
Yesterday it was "lay of 25% of workforce today to avoid paying some bonus thingie that kicks in Nov 1". Well, there's still couple of hours in which this may become true, but I don't expect it, and meanwhile I see the bonus angle has been silently dropped.
For salaried, at-will employment, the employer can demand whatever they want and fire you for whatever reason they want. There are exceptions for, like, sexual harassment and racial discrimination, but not for "I disagree with the boss about what is a realistic project timeline".
I had a manager like this once. They won’t explicitly ask you to work on the weekends, but the deadline in combination with the workload made it obvious you would be working on the weekend and late nights. So glad I left that toxic place.
They are all exempt employees so they aren't covered by a lot of labor law, such as getting paid "overtime", etc. This is how professional, salaried employment works. Exempt employees tend to be paid very well and have great benefits though.
You can fire an employee for no reason at all since employment is "at will". Musk probably assumes a good deal of the workforce is lazy and/or incompetent and he doesn't want to pay them. So he's figuring out who to fire.
There's no legal framework for weekends. They were originally created due to massive labor advocacy and strikes. I imagine since such advocacy has been undermined for decades it makes sense the victories the advocacy fought for are also being clawed back.
Even if the firing is legal - and California does have restrictions when a company fires a large number of people at once - arguing that it's "for cause" to withhold severance packages is going to be a lot more difficult.
In the US, there is a fair amount of respect (in business at least) for the idea of “consent to continue the interaction can be revoked with or without cause at any time”.
I personally can’t see a good reason why it should be illegal outside the rare edge case where there is only a single employer in a geographical region, and even that unfortunate situation should probably be remediated with a different type of government intervention.
Employers should be able to be unreasonable and shoot their business in the foot, no?
It's not a good idea to conflate layoffs of the rank-and-file with the 3 execs that were fired "for cause". At the exec level, it's a whole different ballgame. All of these execs are multi, multi millionaires. I'd honestly be pretty shocked if they don't sue, and at least from what I know now I'd be shocked if they don't win. In exec contracts with golden parachutes, "for cause" clauses are almost always very specific and normally entail breaking the law or company policy. That is, unless these execs were sexually harassing people or stealing money, "We think you did a bad job" won't cross the "for cause" threshold.
Not sure I trust this source. He seems to relay rumours based on second hand sources. At least from Blind, it seems like all reports of employees being fired so far is fake. Not even sure the weekend work story is true.
I’m the opposite. Never was a Musk fan but now that I see him trying to reform twitter I’m very impressed he’s willing to take so much flak for such a direly needed goal.
Agreed. I'm excited to see what the Twitter "business" becomes under Musk's leadership.
For too long Twitter has flirted with being a public utility and not a company.
For sure it will be a hard time for the current team - both those that stay and those that go as it is with any significant change.
Now I agree twitter is deeply flawed but there is no guarantee that a changed twitter will be better twitter. Especially I would say when it’s directed by someone who shows such little regard for law and responsibilities.
I still have a lot of respect for Musk as bold business exec. But my respect for him as a person dropped to near-zero when he promoted the baseless conspiracy theory about Paul Pelosi.
I'm constantly shocked that "leveraged buyouts" are a thing. It seems like taking a business and loading it up with debt is a recipe for failure that would introduce a lot of risk for the lender, but banks and other capital holders continue issuing the debt.
I cannot fathom it either. First I heard that it was a thing was when the Glazers borrowed money to buy Manchester United then saddled them with half of the debt. They had no debt prior to being purchased. I don't know how common it is, but it feels like you're telegraphing that you're going to use the organization you bought as a piggy bank or a plaything. Like, see this shit (from https://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester...)
From 2016, the Glazers paid themselves annual dividends from the club, at over
£20 million every year from 2016 to 2020. In that same period, the club's debt
repayments "all but ceased", described The Daily Telegraph, while interest
payments continued. While paying dividends was common in business,
Manchester United were the sole Premier League club to "pay regular
dividends of any kind", reported The Daily Telegraph in May 2021
I don't even like Man Utd, but that's shady as hell
> constantly shocked that "leveraged buyouts" are a thing
LBOs were a cure to the poison of the post-war conglomerate [1]. Those were run as personal fiefdoms by aloof executives and their cronies.
The traditional check was M&A. Conglomerates having no clean competitors, this–in practice–meant a buyer putting up cash and borrowing the rest, buying the company, taking out a loan in the company's name, using that to pay themselves and then paying back the personal loan. The only purpose the buyer's credit served was to gatekeep. LBOs compress that process, letting anyone challenge management if they can convince investors/lenders to back their vision.
I'm guessing you hear a lot more about the failures/impending failures in LBO financing than you do the successes/non-defaults. You could calculate the implied probability of default from the POV of the lender by comparing the financing terms to "assumed risk free" treasuries, and then compare that with the historical data to see how accurate they are at pricing that risk. If you'd rather not do that work, I'm sure there's plenty of papers in the academic literature examining that exact question.
They have a place and can be used effectively to solve actual problems. Old line businesses with too many units and complicated business arrangements can actually benefit from being torn apart and rebuilt effectively.
The problem is, when the Fed gives out exceptionally cheap interest, it makes it incredibly easy to apply this strategy even when the underlying business would not benefit from it.
It's not intended for the business to continue operating after a leveraged buyout. Leveraged buyouts are typically used where the company has assets that aren't "productive" or is made up of more-or-less independent units that are worth more separate than together.
In these cases, cutting expenses by firing people is usually the first step, since the business' revenue stream can usually continue on autopilot for a while.
I expect Twitter to report record-breaking profits next quarter and Twitter's share price to go up accordingly. Maybe even enough to fill in some of Musk's hole.
Because they expect that debt to be inflated away as the currency its denominated in goes to zero (and they know they'll get replenished with cash when they need it via the Fed [1][2]).
It might be arbitrary and pure speculation but with ~7500 employees (3000 of which are engineers) I think they'll be able to do just fine with 5000. -25% of staff would just mean going back to 2019 staff levels...
I remember it was a common meme on HN to ask what Twitter's thousands of employees did all day, even back in 2015. So maybe I'm falling into that trap. But I do still wonder.
Your number might be something other than cash flow. IIRC Twitter has net negative cash flow and about $4B in existing long term debt prior to the new debt financing of the acquisition.
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.
$1 billion across 5000 employees is just $200,000 each. I suspect if you add total comp plus expenses for each employee you get to $200,000 pretty quickly.
Pardon me, but isn't this the standard operating procedure for leveraged buyouts of "inefficient" businesses?
Cut expenses to the bone, resulting in a higher profit margin on the same revenue, coast on that revenue while dismembering the business for anything valuable, and then load any transferable debt to the carcass and declare bankruptcy?
Interesting idea. But, wouldn't that be competing with TikTok? And, Vine hasn't been a thing in what, 6 years? That's not so much "bringing back" as developing something new.
Yep, literally every company that ever buys another company look to streamline it. In every single case where they say 'no layoffs planned,' just means they are waiting until they actually own the company and do the research to decide when layoffs will be.
Readit News
https://www.nytimes.com/2022/04/25/technology/twitter-employ...
> At the meeting with employees on Monday [April 25], executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
So, really those two long sentences should be rewritten:
Mr Agrawal, as an officer of the company, engaged in rampant speculation, perhaps to reassure employees (or himself) that their jobs were safe for three months to a year, even though Mr. Musk had repeatedly indicated otherwise.
Even laying off 25% of the workers would be hard to justify at this point. I'm certainly curious where this all is going.
It wouldn't because we're in a downturn and Twitter was already planning layoffs.
Those that remained productive will probably have better prospects for keeping their jobs, and for suing if they're fired.
The only parties being cited as fired for cause are the outgoing executives, and WaPo article at the top of this post provides reasons for that.
Why would this be? Musk has already signaled his lack of confidence in the previous management, why would this not extend to their hiring practices, training, HR policies, etc.?
https://twitter.com/gergelyorosz/status/1587042365084209153?...
> I talked with an engineering manager who was at Twitter for 5+ years, and got laid off on Sunday "for cause". They were too exhausted from working over the weekend to talk longer: they first need to sleep.
Musk doesn't meet the cause outlined in their employment contracts. They'll get their executive early termination severance but it'll require some legal action first.
I had reports from friends who worked there that they were asked to stay available over the weekend, presumably for situations like this, or requests from the "war room" group that has been setup.
Does this mean that they have or deserve different rights under contract law than others do? What if their counterparty is even less "strapped for cash"?
Now, at some level, it still stinks that the CEO is getting paid so many tens of millions of dollars for less than a year's worth of work. To solve that, you'd have to cut CEO pay in the first place, because just removing the parachute would incentivize clinging to their existing paychecks.
The "for cause" bit is a transparently vindictive breach of contract. They will get their money and then some. In fact they may know some lawyers who know how to take Elon's money.
Closing the sarcasm, yes, layoffs have costs (various costs, including to the morale), but there are reasons why organisations do them anyways.
I actually think that, below the CEO level, the managers are engaged in wishful thinking, rather than deceit.
Deleted Comment
>He requested that logged out users visiting Twitter.com be redirected to the Explore page that shows trending tweets and news stories, according to employees familiar with the matter who requested anonymity to speak without the company’s permission. Before, visiting Twitter’s homepage while logged out showed only a sign-up form,
- https://twitter.com/joshelman/status/1586812933043933184
> 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
How do the designers who work at these tech companies not understand that repeatedly annoying non-user visitors doesn't make them want to sign up? Nor incentivize others to link to it?
Enjoy :)
Deleted Comment
https://nitter.net
Other instances here:
https://xnaas.github.io/nitter-instances/
Deleted Comment
the site works whenever i login via a fresh, private browser session. for a minute i thought i was blocked after muting the words "elon" and "musk"
Doesnt work for me
PS. https://en.wikipedia.org/wiki/Corporate_raid
Corporate raid is aimed at making changes to the company specifically to increase share price. The idea is that the resulting share price increase covers at least significant part of the cost of getting majority stake. This makes the buyout relatively cheap or even free.
Which of course makes little sense if you are also taking the company private.
I would also like to point out that the whole point of buying a controlling stake in the company usually is to exert some control. And to buy it out completely and take it private is to exert complete control without having to explain yourself (too much).
There is, of course, possibility of the investor buying shares because they are content with current management and do not plan to interfere even after they have acquired majority stake. But this, in my experience, is quite rare.
Deleted Comment
I don’t care what Elon does with Twitter tbh, as long as it’s something different. Good luck to him.
Musk won't change anything for the better.
Elon wanted to back out and the executives finessed him masterfully. Everyone with vested shares is a recipient of a $44,000,000,000 cash infusion into the bay area economy, while media stupidly focuses on cliffs and parachutes that wont be paid.
Everything in this story is a complete mess. The acquirer, his attitude towards workers, the entitlement and complete delusion of the workers and even more than that the misleading of the public AND the workers of the previous arguably failed management, along with their belief that they are the ultimate gatekeepers of truth in this world.
I'm not sure what deeper societal lesson this whole thing entails, but it definitely in part shows two societies, both of which are completely detached from the normal hardships an average human on this planet has to go through.
You look at your bank account and think "yeah, I AM a Rockstar! I DO deserve this! Everybody wants to be ME!"
Rinse and repeat that general attitude for ten years or so and blammo (which is even more explosive considering large chunks of the millennial generation were already coddled—and yes, I'm a millennial). You get a bunch of entitled brats who view anyone who isn't doing what they're doing as _less than_ (which is ironic considering those "less-thans" keep the bubble they live in running—electricity, food delivery, sewage systems, etc).
Pepper in the absolutely psychotic, cult-level diatribe these people sputter about "changing the world" and "making dents" and you have a low-level Jim Jones field jamboree brewing. It's absolutely zero surprise what's come out of SV over the last decade and change.
And that doesn't even factor in the pharmaceuticals!
I imagine that at this point, many are staying until they get fired so they can collect severance pay.
That is what I would do. I absolutely would not work for Elon’s Twitter long term unless they paid me a king’s ransom, but I would definitely stick around and jump through the hoops just long enough to get a nice payout.
it's the epitome of Twitter, overflowing with righteous indignation online but won't get off their ass to do anything IRL.
"Workers" is strange to me when talking about people who make 5-10x the national average (i.e. make more than many average executives in other industries). They're employees, but "workers" implies blue collar in my opinion. I'm fine with including staff in retail, restaurants etc, but someone making $500k+ a year doesn't fit into that category.
How is it legal to (even threaten) firing if a new assigned task that takes a long time is not done on time?
You can fire an employee for no reason at all since employment is "at will". Musk probably assumes a good deal of the workforce is lazy and/or incompetent and he doesn't want to pay them. So he's figuring out who to fire.
Usually your contracts doesn't specify time worked per week, only that you finish your work.
I personally can’t see a good reason why it should be illegal outside the rare edge case where there is only a single employer in a geographical region, and even that unfortunate situation should probably be remediated with a different type of government intervention.
Employers should be able to be unreasonable and shoot their business in the foot, no?
I think this is a reality check and a power play by Musk to remind employees of the fact.
Dead Comment
https://twitter.com/elonmusk/status/1586885887341645824
I have a hard time believing there was not complicity between the 3 key execs, and Yoel Roth, according to that image.
This wasn’t needed and will be looked upon with embarrassment by him and all of tech in a decade.
For sure it will be a hard time for the current team - both those that stay and those that go as it is with any significant change.
Solving the problem of fossil fuel for private transport? Meh.
Massive cost reductions in space exploration and development of reusable rocket boosters and technology to get us back to the moon? Pushover.
Ensure more people can drop the n-word and spread disinformation and hatred of democracy for free? This is important.
Cash flow last year $630 million.
I think 25% staff reductions is just a starting point.
LBOs were a cure to the poison of the post-war conglomerate [1]. Those were run as personal fiefdoms by aloof executives and their cronies.
The traditional check was M&A. Conglomerates having no clean competitors, this–in practice–meant a buyer putting up cash and borrowing the rest, buying the company, taking out a loan in the company's name, using that to pay themselves and then paying back the personal loan. The only purpose the buyer's credit served was to gatekeep. LBOs compress that process, letting anyone challenge management if they can convince investors/lenders to back their vision.
[1] https://en.wikipedia.org/wiki/Conglomerate_(company)
The problem is, when the Fed gives out exceptionally cheap interest, it makes it incredibly easy to apply this strategy even when the underlying business would not benefit from it.
We simply left the tap on _way_ too long.
In these cases, cutting expenses by firing people is usually the first step, since the business' revenue stream can usually continue on autopilot for a while.
I expect Twitter to report record-breaking profits next quarter and Twitter's share price to go up accordingly. Maybe even enough to fill in some of Musk's hole.
[1] https://www.federalreserve.gov/econres/notes/feds-notes/unde...
[2] https://www.youtube.com/watch?v=n1xgQeCiu6k
https://www.statista.com/statistics/272140/employees-of-twit...
I remember it was a common meme on HN to ask what Twitter's thousands of employees did all day, even back in 2015. So maybe I'm falling into that trap. But I do still wonder.
They only have made a profit 2 out of the last 10 years.
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.
Cut expenses to the bone, resulting in a higher profit margin on the same revenue, coast on that revenue while dismembering the business for anything valuable, and then load any transferable debt to the carcass and declare bankruptcy?
Before reels or tiktok or stories or shorts, there was vine and people loved it. But it didn't make any money.