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So, Elon Musk has saved Twitter then

Very rough numbers here:

Elon Musk wasn’t lying last October when he told Bloomberg that 75 percent of the employees at his newly acquired toy,, wouldn’t lose their jobs under his ownership, as The Washington Post had reported at the time. Turns out, it’s closer to 80 percent. Of the roughly 7,500 people working there before Musk’s takeover, CNBC reports Friday that barely 1,300 in total, and fewer than 550 full-time engineers, are left at the husk of a company, either through said layoffs or voluntary resignations.

Twitter’s costs were around $5 billion a year. Around and about you understand.

Costs don’t run exactly according to numbers in employment but it’s not going to be all that far off. $5b divide by 7,500 and that’s $666k per head.

And, well, actual proper engineers in SF might well be half that in actual wages. Around and about. Plus office space, support and all. We’re not that far wrong at least. Certainly not out by more than 2x.

Now there’re 1,300 at Twitter. Or close on $900 million in costs.

Twitter’s revenue last year was maybe $5 billion. It didn’t lose that much after all. Imagine now that Twitter revenue has halved. Twitter is now nicely profitable, isn’t it? Rev of $2.5b, costs of just under $1b, success!

Now, agreed, very rough figures and all that. But start from those numbers. Now how badly do you have to torture them – or how bad does the ad revenue fall have to be – for Twitter to be losing money? And think that it has fallen that much?

You can even add in $1 billion and up a year in debt repayment if you like. Even then it’s not obvious that it will have negative cashflow.

16 thoughts on “So, Elon Musk has saved Twitter then”

  1. The fact that there’s been no real discernible change in Twitter for the vast majority of users makes one wonder what all those now-ex employees were actually doing…

  2. No wonder the site runs like trash these days.

    That’s what everyone loves about journos: the honest professionalism. 🙂

    Aside from firing everyone that wasn’t nailed down, Musk has reinstated numerous far-right and fascist accounts that had previously been permanently banned without so much as a second glance at the “moderation council” he was supposedly going to establish

    African Man Bad, reeeee!

    But Twitter isn’t the only company shedding staff like water off a wet dog’s coat. Google laid off 12,000 employees this week, Amazon disemployeed 18,000 people globally, and Microsoft eliminated 10,000 positions. Between the three, they’ve put about 70,000 people out of work in the last year alone.

    Just learn to code.

  3. “his newly acquired toy” “the husk of a company” the writer says.

    As JuliaM says, seems to still be working. So who cares what the head count is?

    I’ve got no particular love for Elon Musk and his subsidy hovering history, but in this case – good luck to him.

  4. “Well, that’s an easy one to answer. Bugger all.”

    Actually probably less than bugger all, ie there’s a good chance their removal has made it possible for the remainder to be more productive.

  5. @ Jim

    there’s a good chance their removal has made it possible for the remainder to be more productive

    I wonder if we could sell Musk the NHS? Throwing money at it doesn’t work. Throwing axes might.

  6. It wouldn’t be hard to believe that half of Twitter’s costs are servers in the cloud – after all, Alexa is stated to be costing Amazon $10bn a year to service all of those requests. One of Twitter’s big problems is that you can search back through a decade of Tweets from every single one of it’s users – that requires a lot of continuously running hardware to support.

    That’d put cost per employee at ~$300,000. After the layoffs, that’s $0.4bn staff costs, but still around $2.5bn servers. Call it $3bn all in to keep the lights on.

    If advertising halves, they’re still ~$0.5bn a year underwater.

  7. A good chance? Absolute certainty. As some people still working at Twitter have voiced.

    It’s a rough guesstimate, but in the past months the number of actual SW/HW engineers at Twitter doing Actual Stuff has risen, as they were plucked from the endless Mandatory Meeting Hell and actually put behind a console.
    My bet is that between available bodies, the cutting out of all the bovine excrement, and the hours put in, Musk has effectively quadrupled the manpower he has to Solve Problems as opposed to things pre-Musk.

    And they are Solving Problems. And putting them in without first going all Touchy Feely with “Focus Groups”.
    The latest screaming of those Third Party Facilitator Apps is a good example:
    They weren’t “innocent apps enhancing the Twitter Experience”.
    They were people with mates on the Inside that gave them free access to Twitter’s internal API, which was in and of itself a first-class security nightmare.
    Their apps were specialised in doing Twitter Actions to multiple accounts at once, on schedule and in bulk.
    Those apps were used to … Influence…. ratings and rankings, and were a large operational part of those Offended Twatterstorms the Guardian likes to flap around if they want to make a Narrative.
    And they could do this by having access to something they weren’t supposed to have access to to begin with, especially for free.

    But of course they’re all Offended at being cut off without warning when their mates have been given the Box-Out treatment. Their Salt is delicioussss..

  8. “They were people with mates on the Inside that gave them free access to Twitter’s internal API”

    Umm…. bollocks. The APIs concerned were public and provided by Twitter to any third party that asked for them. I’ve had an API key for dev work before. Didn’t need an ‘insider’ – there was a form online to fill in.

    I think you need to loosen up your tinfoil hat a little.

  9. It might be a public API but it still had rules and it was the people on the inside who let the rules slide

  10. I have seen a bunch of different calculations (and made a few myself) that put the running costs o the new twitter in the $1-1.5B range. Probably at the lower end especially since Musk seems to have removed more people than I expected.

    Ad revenue down 40% according to the article means it’s $3B (no idea what the take up of twitter blue is so ignoring)

    That’s a business with 50-60% gross margins. Not bad at all.

  11. So, Elon Musk Has Saved Twitter Then

    More like done a classic hack-and-burn on costs to guarantee a decent turnaround. Sure, ad revenues are down, but operating costs are down far more an that was always the route to profitability for an organisation as grossly overmanned by those whose main objective seemed to be to do as little real work as possible, if not to actually gum up productivity.

    Elon could have been nastier, getting rid of time-wasters for cause and minimum terms, but by offering a generous, one-time-only redundancy terms of 3-month salary combined with the writing on the wall, I think that was good enough for most Twitter staff who despised Elon anyway.

    More importantly sacking the executives for cause also sent the right message.

    All things being equal, and Elon’s usual antics aside, he’s done a good job in a relatively short timescale. Now he needs to book the profit and handover to an experienced CEO to get on with the day-to-day detail that Elon clearly lacks.

    Let the new CEO and sales team smooth over the cracks and smootch the advertisers back with Elon as just the “crazy owner who leaves us be”.

  12. ” Now he needs to book the profit and handover to an experienced CEO to get on with the day-to-day detail that Elon clearly lacks.”

    He would need to find someone who is impervious to the blandishments of the woke establishment. You can bet your bottom dollar that the moment Elon hands over to an ‘arms length’ CEO that person is going to get all the usual cockroaches crawling out of the cracks trying to get him to water down Elon’s hardcore free speech approach.

    ‘Of course the advertisers would be delighted to come back if you’d just provide us with an Oversight Panel to allow us to flag up any issues we might have’ etc etc.

  13. So, six months ago I said “If advertising halves, they’re still ~$0.5bn a year underwater.” – and today Elon is in the news saying:

    “We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load, Need to reach positive cash flow before we have the luxury of anything else,”

    At the time, there were people claiming that the genius businessman had turned Twitter into a profitable site with his (justifiable but incredibly poorly implemented) layoffs. Now we have a site that suffers constant errors, a mass exodus given the slightest competition and 50% drop in advertising revenue.

    At what point will people start to realise the guy is not actually playing 5D chess?

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