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Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

nytimes.com

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Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#71

Post by Apocryphon »

muzz wrote: post #50
toomuchtodo wrote: post #45

Earlier quoted context omitted.

Nothing lasts forever in tech. How will they monetize Instagram and WhatsApp? Don't show me users. Show me profits from those users if you want to count them.

True, but thus far Facebook has responded well to existential threats by buying companies like Instagram, WhatsApp, etc.

Is that how it works now? Companies with great products but not a sustainable long-term biz plan exit by getting bought out, and larger companies with a greater product but also no far-long-term biz plan buy those companies and survive by having them as fallback products?

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#72

Post by toomuchtodo »

Apocryphon wrote: post #71
muzz wrote: post #50

Earlier quoted context omitted.

True, but thus far Facebook has responded well to existential threats by buying companies like Instagram, WhatsApp, etc.

Is that how it works now? Companies with great products but not a sustainable long-term biz plan exit by getting bought out, and larger companies with a greater product but also no far-long-term biz plan buy those companies and survive by having them as fallback products?

It's acquihires all the way down.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#73

Post by tikhonj »

whitenoice wrote: post #65

Genuine question - why do recruiters hire new people when the company is laying off?

They don't always, but I can think of a few reasons why they would:

- they're hiring for different specialties and departments than what's being cut

- at least in theory, they're hiring people who would be above-average workers while laying off those below average

- they still need to compensate for normal churn, which is probably exacerbated by the layoffs

- they can try giving new candidates weaker compensation to save costs

Ultimately, workers are not fungible and it requires active effort to maintain a team as people come and go. This doesn't change during layoffs.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#74

Post by adventured »

swingbridge wrote: post #3

A sad day for Twitter, but a dose of reality for a lot of the fluffiness in the market at the moment. Companies need to have real revenue and produce real profit and then need a valuation based on sane multiples. Twitter got behind that curve badly and ultimately this is what happens.

You're spot on about Twitter basically being far overvalued. However their problem isn't lack of real revenue. They're tracking to $2+ billion in revenue in the next four quarters. Assuming a significantly slowing growth rate, they can easily double that sales trajectory to $4 billion in three years.

Their problem is that costs are far out of line, which is why they're cutting. Twitter could turn a significant profit if they design for $3 or $4 billion in sales (rather than pretending they're heading toward $20 billion). Their margins should be comparable to Facebook's, their business is no more difficult to optimize.

They have 12% of the sales of Facebook, with ~38% of the employee base. It's an extremely poorly run, bloated business. They're built to scale to Facebook's size, but they will never achieve that size no matter what happens. Long-term they're a $20 or $40 billion market cap business, instead of $250 billion.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#75

Post by nosuchthing »

"Moments" tab gives a good indication that Twitter has no idea where to go and is the sum of boring meetings with marketing consultants.

Twitter had potential, but it appears stagnate as all they've done is created a new version of an AOL instant messenger chatroom with hashtags and 128char limit. Limiting the API tokens for 3rd party developers was a really foolish move.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#76

Post by [deleted] »

jsprogrammer wrote: post #57
yid wrote: post #47

Earlier quoted context omitted.

In 2014, WhatsApp reportedly made $14 million in revenue. By comparison, Twitter made $479 in revenue in just Q4 2014. I think company size generally scales super-linearly with revenue, so a total staff in the thousands seems reasonable for a post-IPO company. Are you suggesting that WhatsApp's model of organization is the norm for a sustainable organization? I think it's a clear outlier in many respects.

Does it really matter what WhatsApp made in revenue? The owners got a $16 BILLION payout. Are you suggesting that WhatsApps business model was based on annual revenue?

[deleted]

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#78

Post by mrmondo »

I see this as a good sign (other than for those laid off of course), Twitter is fantastic but they don't need half as many people as they currently employ for their product. As companies get larger their agility and ability to change decreases. What's important is if they're laying off the right people.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#79

Post by Scoundreller »

philipjoubert wrote: post #43
xienze wrote: post #29

Earlier quoted context omitted.

OK, I'm hearing a lot about hardware there but not seeing where thousands of people are needed to keep it all up. Again, WhatsApp -- 50 employees.

Whatsapp is an outlier in many ways and comparing them with any company will make that company seem bloated. As for the comparison, Whatsapp has no monetization model, no marketing and a simpler product.

WhatsApp charges a subscription fee after the first year of $1/year.

When you have several hundred million users, that adds up. An effective monetization model, if unusual in SV.

Re: Twitter Expected to Begin Layoffs and Stop Headquarters Expansion

#80

Post by adevine »

yid wrote: post #67
jsprogrammer wrote: post #57

Earlier quoted context omitted.

Does it really matter what WhatsApp made in revenue? The owners got a $16 BILLION payout. Are you suggesting that WhatsApps business model was based on annual revenue?

> Are you suggesting that WhatsApps business model was based on annual revenue? Since WhatsApp was a revenue-generation corporation with a board of directors, like any other corporation, before their acquisition, and since I don't like to indulge in conspiracy theories, I'm going to assume that yes -- their business model was based on annual revenue.

> I'm going to assume that yes -- their business model was based on annual revenue.

Then you'd assume wrong. The goal of the board is to maximize return for investors. In WhatsApp case, it's not hard to see that their goal was to grow as fast as possible, revenue be damned, so they could be a very attractive takeover target for a company like Facebook who could eventually hope to monetize that user base.

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