Twitter Layoffs Unlikely to Hurt Company, Will Inspire Big Tech to Rethink Staff Structure

MOSCOW (Sputnik), Kirill Krasilnikov - Mass layoffs at Twitter in the wake of its acquisition by Elon Musk are unlikely to cause problems with the social network's functionality and may even make other tech companies think about their workforce structure, experts and businesspeople told Sputnik.

In late October, Musk finalized the acquisition of Twitter for $44 billion. Following the takeover, Musk changed the company's day-to-day operations, including the termination of Twitter's executives who were responsible for the platform's privacy, cybersecurity and censorship, as well as about two-thirds of Twitter's employees.

These steps caused a ripple across the tech industry and beyond, with some lauding Twitter's new owner for his take-no-prisoners approach while others expressed concern over the move, going as far as to predict that the platform is about to crash. However, experts surveyed by Sputnik think that this scenario is not likely to come to pass.

"Highly unlikely. Let me use a comparison to illustrate: At the moment of its acquisition, WhatsApp had 42 employees, 400 million daily active users, video and voice call functionality, end-to-end encryption, and its own in-house cloud infrastructure. Twitter has 250 million daily active users and much simpler functionality," Alex Fink, CEO at information platform Otherweb, said.

(FILES) In this file photo illustration taken on April 14, 2022 a phone screen displays the Twitter account of Elon Musk with a photo of him shown in the background, in Washington, DC.

© OLIVIER DOULIERY

He noted that Twitter uses Amazon Web Services for cloud computing and concluded that while Musk's actions do entail some PR risks, the engineering risks seem minimal.

"Serious software companies can be run by small numbers of people, and that's really what technology is all about; scaling up human effort in effect size/range," the Miami-based tech entrepreneur told Sputnik, suggesting that "the lever and fulcrum lets us lift beyond our strength, 'tele-grams' and 'tele-phones' underneath 'tele-communications' would have been understood by the Ancients quite literally."

Against The Grain

It is worth noting that Musk's firing spree comes at a time when other major tech companies such as Meta*, Amazon and Netflix are also slashing their workforce, since the United States is "in a recession, and interest rates have spiked because the Fed always does this dumb overcompensatory scrambling to fix its own mistakes," as the Miami-based businessman put it.

However, Fink thinks that what is happening at Twitter is not related to the general industry trend, since most companies are laying off employees to preserve stability as revenues are falling, while Musk is trying to change Twitter into a "completely different company."

"The layoffs will only lower the burn rate, giving the new team more time to actually change the way Twitter functions and provides value to people. In other words, if Musk succeeds - it will change the information ecosystem, but it will not affect management practices in the tech industry," Fink stated.

A similar opinion is offered by Sudhir Khatwani, the founder of The Money Mongers, an independent think tank on crypto, blockchain and Web3.

"Unlike other tech companies, Elon Musk is on a different route. He is not only firing employees to cut down Twitter’s expenses. But it seems like employees who wouldn’t prefer the work culture Musk is trying to implement are getting fired. Also, it seems like Elon only wants to work with people he is more comfortable with. Hence, there are some new hirings," Khatwani said.

The Twitter logo is seen on the awning of the building that houses the Twitter office in New York, Wednesday, Oct. 26, 2022. Elon Musk posted a video Wednesday showing him strolling into Twitter headquarters ahead of a Friday deadline to close his $44 billion deal to buy the company.

© AP Photo / Mary Altaffer

He added that Musk's stated plans to turn Twitter into a go-to app for everything, like China's WeChat, could make it successful in the long run and that the billionaire would try all things possible to maximize Twitter's popularity and expand its user base.

"And when it happens, it will surely put certain tech companies out of business," Khatwani concluded.

The tech-enterpreneur from Miami, for his part, thinks that Musk will get "a lot of people wondering why their 'tech' workforces are so, so large, when it's clear that Twitter, a core infrastructure of the internet, didn't need nearly so many PMs [project managers] and whatnot."

Legal Backlash

At the same time, some view Musk's recent steps as unproductive and potentially detrimental to the company, especially since his fast-and-loose approach to layoffs will pit him against many countries' labor laws. Even in the US, there was at least one class-action lawsuit filed in San Francisco earlier in the month.

According to Kevin Poulter, employment partner at UK law firm Freeths, European employees are protected by the European Working Time Directive, also adopted by the United Kingdom, which shields them from being overworked. This means that Musk's demands for employees to bear with long hours or leave could result in legal trouble. And there is also the matter of UK workers employed for more than two years being protected from dismissal on unfair grounds.

"Twitter’s structural slash and burn project have done it no favours and may not even have saved it any money, certainly in the short to medium term. Public outrage, user exodus and unplanned resignations of business critical employees have come alongside talk of numerous group actions by former employees," the legal expert said.

*Meta is banned in Russia as an extremist organization