News: CEO Musk encourages layoffs in tech industry, drawing from Twitter's own experience

Leadership

CEO Musk encourages layoffs in tech industry, drawing from Twitter's own experience

Musk's podcast interview shed light on the criteria he used to determine which employees would remain at Twitter. He highlighted the importance of excelling in roles, holding critical positions, and prioritising the company's interests over personal agendas.
CEO Musk encourages layoffs in tech industry, drawing from Twitter's own experience

Elon Musk claimed that prior to implementing mass layoffs, Twitter had a considerable number of employees engaged in tasks that appeared to lack significant value. “We had "a lot of people doing things that didn't seem to have a lot of value,” he said. 

Speaking virtually at The Wall Street Journal's CEO Council Summit in London on Tuesday, Elon Musk remarked, “I think that's true probably at most Silicon Valley companies, maybe not to the degree to which it was at Twitter.” 

"Twitter was in a situation where you'd have a meeting of ten people and one person with an accelerator and nine with a set of brakes, so you didn't go very far," he explained and further added that other major tech companies too have the potential to make additional job cuts without adversely affecting productivity, reported Business Insider. 

There has been recent debate surrounding the concept of "fake work," with executives and investors arguing that tech companies engaged in overhiring and created unnecessary positions as a form of "vanity metric." Supporters of this theory suggest that it is the reason why tech giants are now implementing extensive job cuts.

Business Insider reported that Musk informed conference attendees that Twitter currently employs approximately 1,500 people, which he considers to be "probably a reasonable number." However, two individuals familiar with the company had previously informed Insider that the actual count of full-time employees was closer to 1,000.

By the end of 2021, Twitter's employee count exceeded 7,500. Since Musk's acquisition of the company for $44 billion in late October 2022, he has significantly reduced its workforce, citing the need to reduce costs and ensure the company's survival. Within a week of assuming control of Twitter, Musk initiated a layoff that affected approximately half of its employees.

Subsequently, thousands of employees have either been terminated, laid off, or voluntarily resigned. This wave of dismissals encompassed both high-level executives and employees who voiced criticism regarding Musk's stewardship of the company.

The remaining workforce was tasked with pledging their commitment to Musk's vision for "Twitter 2.0," which entailed working diligently with long hours and high intensity. Failure to embrace this vision would result in layoffs. Musk has consistently emphasised the need for unwavering dedication from employees in order to retain their positions.

During a podcast interview in December, Musk explained his criteria for determining which employees should remain at Twitter. He emphasised the importance of individuals being exceptional in their roles, holding critical positions, and prioritising the company's interests over their own. However, recent indications suggest that Twitter is preparing to increase its workforce once again as it moves closer to achieving positive cash flow.

“If we get lucky, we might be cash-flow positive next month, but it remains to be seen. We are going to start adding people to the company," Musk said at Tuesday's conference. 

Musk had previously indicated in an interview with CNBC that he might consider rehiring some of the employees who were laid off during the early stages of his leadership.

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Topics: Leadership, #Layoffs, #HRTech, #HRCommunity

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