The age-old tech question “How many programmers does it take to change a lightbulb?” Eliminated by “how many people does it take to run a tech company”. A popular answer to the latter is “less”.
Since buying Twitter, Elon Musk has laid off about three-quarters of the workforce. So far he cannot claim any great success. Advertising revenue is low and outages are recurring.
Twitter serves as an extreme example of what is possible. After years of staff expansion, technology is shrinking.
According to the website Layoffs.fyi, US tech companies have announced nearly 300,000 job cuts since last year. Alphabet is laying off 6 percent of its workforce, about 12,000 people. Amazon has announced 18,000 job cuts. Meta is expanding its lay-off program. There is no pattern to where the ax falls. Twitter no longer has a press department. Amazon has downsized its Alexa voice assistant team.
Companies point to financial pressures. But some Silicon Valley residents believe the workforce is too big. Investor and Musk acolyte David Sachs, for example, has called Twitter bloated.
One metric can support his case. Apple’s revenue per employee fell in 2022 compared to the previous year. Twitter sank before it was bought. Staff cuts should increase this. Meta’s revenue per employee could grow by a third this year compared to 2022, and Amazon’s by a tenth.
Redundancies need to be seen in the context of previous breakneck expansion. Meta’s headcount at the end of last year was about 86,500. The first phase of lay-offs cut 11,000 jobs. The second will kill 10,000 workers. That takes the U.S. social media group’s workforce to about 65,500. That’s 20,000 more than before the pandemic began.
The founders, who recall that their company consisted of a handful of friends working in a rented office, lament the horrors of middle management. Flat management is a response. This is supposed to drive innovation but can result in dysfunctional workplaces.
Canonically, no programmers are needed to screw in a lightbulb—it’s a hardware problem. But there is no right answer for tech company staffing. Headcount reductions improve short-term profits per employee. Long-term performance may deteriorate. Meta employees say job uncertainty has prevented some projects from being completed. Taken too far, lay-offs reduce productivity.
Lex: summation of pars exercises
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