How Many People Does a Tech Giant Really Need?
For the past decade or so in Silicon Valley, Big Tech has been vacuuming up engineers left and right, even if there hasn't been a clear need for the extra bodies.
But when you're Google and have billions that you can throw at moonshot projects, you might as well fill their time trying to make internet-beaming hot air balloons or a pill that detects cancer.
- The fantastic HBO comedy Silicon Valley portrayed the "rest and vest" culture well, as newly hired Hooli engineers were sent to pretty much f*ck off on the roof for the day
- Many a TikTok from Meta/Twitter staffers have shown days filled with matcha lattes and foosball rather than actual work.
Elon's kicking everyone out and ending the party. That could either lead to a massive collapse of Twitter or show the industry that you can operate an insanely profitable tech conglomerate with waaaay less people.
- In a ZIRP world, when you have free money to burn, it makes sense to scoop up talented engineers to make sure they don't head to a competitor or start a company that disrupts your business
- That equation changes when you actually have to turn a profit and can't just fund infinite growth with Monopoly money
- The "extremely hardcore" work environment that Elon has implemented at Twitter was broadly rejected by existing workers, to the point where management was scrambling to keep key talent
If a tiny, intensely focused team can keep Twitter alive and turn a profit while doing so, expect other tech companies to follow suit. Nothing pads a bottom line like slashing swaths of 6-figure employees.
At the same time, we talked last week about how the American labor market has long-run structural issues, and axing big chunks of your workforce could come back to bite you.
One thing is clear-stop posting f*cking TikToks about how cushy your tech job is. It's making everyone look bad. Just enjoy your free kombucha on the roof in peace.
The big question: Can Elon pull off an epic turnaround of Twitter with a skeleton core of employees? And if so, will other tech companies follow suit to claw back some of their equity losses?