6 months ago it was all painted (maybe seemingly, though, by prior executives who weren't speaking for Musk) as if this wouldn't be a big deal for employees, which to me makes this idea that people are being rapidly fired "for cause" after a suddenly-imposed weekend work shift deadline extra shitty :/. (Even if I do sometimes claim that Twitter is incompetent as an organization or bloated with idle staff, these are humans that deserve some basic respect with how they handle a transition plan.)
> At the meeting with employees on Monday [April 25], executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
So, really those two long sentences should be rewritten:
Mr Agrawal, as an officer of the company, engaged in rampant speculation, perhaps to reassure employees (or himself) that their jobs were safe for three months to a year, even though Mr. Musk had repeatedly indicated otherwise.
Those being laid off for cause are the 3 senior level executives (the old CEO, the lead counsel, and the content policy head). Those 3 had a 100+ million cumulative severance package which they are now no longer eligible to receive, although none of them are strapped for cash.
The senior management who were fired "for cause" are all examples of how golden parachutes are properly used, and they all performed to the highest possible standard: They delivered a full-price payout to shareholders.
The "for cause" bit is a transparently vindictive breach of contract. They will get their money and then some. In fact they may know some lawyers who know how to take Elon's money.
You also need to give two months notice, or compensate for two months time, if you're going to have a big layoff. Laying off 50% of employees is also going to add up. 3,500 employees * $20,000 = $70,000,000.
I've been through changes like this several times and the SURE indicator that big changes are coming is when the higher-ups say "Nothing will change". Seriously.
I actually think that, below the CEO level, the managers are engaged in wishful thinking, rather than deceit.
My guess is Musk wants to punish them for making him go through with the deal _he agreed to_. He doesn't want to own Twitter and he's making them feel it.
So, it was a simple corporate raid after all. Welcome back to the 70s: energy markets problems, inflation, and now finally some good old corporate raiding with LBOs.
I'm constantly shocked that "leveraged buyouts" are a thing. It seems like taking a business and loading it up with debt is a recipe for failure that would introduce a lot of risk for the lender, but banks and other capital holders continue issuing the debt.
It might be arbitrary and pure speculation but with ~7500 employees (3000 of which are engineers) I think they'll be able to do just fine with 5000. -25% of staff would just mean going back to 2019 staff levels...
I remember it was a common meme on HN to ask what Twitter's thousands of employees did all day, even back in 2015. So maybe I'm falling into that trap. But I do still wonder.
Your number might be something other than cash flow. IIRC Twitter has net negative cash flow and about $4B in existing long term debt prior to the new debt financing of the acquisition.
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.
Pardon me, but isn't this the standard operating procedure for leveraged buyouts of "inefficient" businesses?
Cut expenses to the bone, resulting in a higher profit margin on the same revenue, coast on that revenue while dismembering the business for anything valuable, and then load any transferable debt to the carcass and declare bankruptcy?
Key Provision: "Layoff of 50 or more employees within a 30-day period regardless of % of workforce. ...."
Penalties for Violation: "A possible civil penalty of $500 a day for each day of violation. Employees may receive back pay to be paid at employee’s final rate or 3 year average rate of compensation, whichever is higher."
Doesn't seem like an insurmountable obstacle. From some Googling:
"Employers who fail to provide notification must provide their laid-off employees with back pay and benefits for the period of the violation (which means the amount of time by which their advance notice fell short of 60 days)."
The value of ripping off the Band-Aid could easily be worth two months of severance in his mind.
The layoffs, if any, haven’t even been announced yet and the only sources in the article are anonymous sources who can’t agree with each other about the supposed impending layoff.
I don’t see any reason to suspect they’re going to somehow violate the law and cost themselves additional fines if or when they do it. This is just about speculation about what Musk will eventually do.
I was laid off from another company under a warn notice in NY and I went home the first day and kept getting paid with full benefits for 3 months. I then got a redundancy payment. It was under the condition I couldn't work for another company.
My understanding is that the WARN notice does not apply when employees are terminated for cause. This has the extra "benefit" of not having to pay out unemployment claims.
Considering breaking the law is one of Musk's seemingly favorite hobbies, I wouldn't be so sure on a WARN notice. The punishments for non-compliance isn't very much.
Given that none of this is official, and there are at minimum 3 different reports about the quantity and timeline of layoffs I dont think anyone is concerned about a WARN notification
I beat even Elon, at this moment, does not have a full accounting of what the layoffs will be. This is all just pure media hype and nonsense with very little basis in truth or reality
> Another person familiar with the deal who spoke on the condition of anonymity to discuss sensitive matters last week said the total number of layoffs is likely to be closer to 50 percent.
Unless I’m missing something, the only sources for this article are a mix of speculation and anonymous sources who can’t even agree with each other about the layoff.
There's actually quite an involved skill to reading and fully understanding this kind of writing - and it's infuriatingly difficult to pick up that skill (I've been developing it by spending time talking to professional journalists, but I'm still not there yet).
When you read "another person familiar with the deal who spoke on the condition of anonymity to discuss sensitive matters", you need to translate it to something more like the following:
The journalist who wrote this has found a credible source, who has insider knowledge.
That source has requested anonymity, and the journalist finds that request credible.
The journalist then used their skills and experience in writing about this area over the course of their career to evaluate if that source was trustworthy. They also considered if the source had their own motivations which could affect what information they chose to share and why.
The journalist may have then cross-checked that information against other sources of information to help evaluate its credibility. This becomes more important the more high stakes the claim in question becomes.
An editor (and potentially even separate fact checkers) evaluated the statement as well, and applied judgement as to whether it held up firmly enough to be published.
There are so many phrases like this in top-tier journalism. When an experienced journalist reads an article from someone else that says "a senior official in the administration said..." they can often narrow that down to just a dozen or so potential people, based on their knowledge of that beat.
As a non-journalist reading newspapers this is pretty infuriating, because there's this whole language that you need to know about in order to fully understand what's being communicated here.
WaPo isn't the best of new reporting agencies [0], but it's certainly not the worst. They do have standards and they don't make up the large majority of their data. Meaning, they have actually talked to someone that is 'familiar' with the 'deal' at some point 'last week.' It's not pure speculation on WaPo's part, though it maybe pure-unrefined-grade-A speculation on the contact's part.
If I had to bet, and many HNers out there are currently in that seat, then I'd bet on their reporting over other forms of pure speculation.
Can verify that Twitter is laying people off. Several contacts at Twitter were laid off this weekend and hoping they I could submit their resumes to my current employer.
They were told that these were performance based terminations, despite not receiving any negative evaluations during their time at Twitter. They were also told they needed to sign NDAs in order to receive any severance.
Sometimes people have their own motives and don't always tell you the truth or at least omit to tell you their plans. As a co-worker once told me, welcome to the mud pit along with everyone else you'll be a competitor with while trying to build a career and hopefully a decent product.
This is mainly media workers exploiting current events for traffic, even if their content is misleading. We really need to sort out media corruption and incompetence.
The precursor was this recent WaPo article Tesla engineers were on-site to evaluate the Twitter staff’s code, workers said [1] which hinted at the cuts.
Not sure what Musk's intentions are with this. Normally this will lead to the best people updating their resumes and switching over to less toxic places ASAP. You are left with people who are attached to their ancient code or who can't find good jobs elsewhere.
> The company has yet to release a formal announcement of the acquisition. The communications department has gone silent. Rumors have swirled about layoffs, with some notices going out quietly.
Is it just me or is this headline totally misleading?
Terminating huge amounts of the workforce when they have next to no knowledge of the inner workings of the company... well, it's going to be a disaster, and I think all the tech people here know it. I'm sure there are some areas to cut, but they almost certainly don't know which yet. Cutting 25%, you're going to mess up. Then you have to face the reality that the other 75% will be seeking the exit - few want their workload to increase by 33%, plus work for someone as mercurial and abusive as Musk and his team, plus be a party to the dying company which will inevitably become a more effective tool of the alt-right and extremists.
quick question here. I'm completely in the dark about US labour law and such but is it possible to lay people off if the sole purpose is to prevent them from receiving stock compensation? Sounds kind of wild given that it seems expected compensation when you signed a contract to work there in the first place.
[+] [-] phantomathkg|3 years ago|reply
[+] [-] saurik|3 years ago|reply
https://www.nytimes.com/2022/04/25/technology/twitter-employ...
> At the meeting with employees on Monday [April 25], executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits packages for a year after the deal was finalized and there were no immediate plans for layoffs, he added.
[+] [-] gunapologist99|3 years ago|reply
So, really those two long sentences should be rewritten:
Mr Agrawal, as an officer of the company, engaged in rampant speculation, perhaps to reassure employees (or himself) that their jobs were safe for three months to a year, even though Mr. Musk had repeatedly indicated otherwise.
[+] [-] linuxhansl|3 years ago|reply
Even laying off 25% of the workers would be hard to justify at this point. I'm certainly curious where this all is going.
[+] [-] dirheist|3 years ago|reply
[+] [-] Zigurd|3 years ago|reply
The "for cause" bit is a transparently vindictive breach of contract. They will get their money and then some. In fact they may know some lawyers who know how to take Elon's money.
[+] [-] jjfoooo4|3 years ago|reply
[+] [-] drowning-secs|3 years ago|reply
[+] [-] mhewett|3 years ago|reply
I actually think that, below the CEO level, the managers are engaged in wishful thinking, rather than deceit.
[+] [-] TheDarkestSoul|3 years ago|reply
[+] [-] la64710|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] skhr0680|3 years ago|reply
[+] [-] H8crilA|3 years ago|reply
PS. https://en.wikipedia.org/wiki/Corporate_raid
[+] [-] swozey|3 years ago|reply
[+] [-] iammjm|3 years ago|reply
[+] [-] duxup|3 years ago|reply
Cash flow last year $630 million.
I think 25% staff reductions is just a starting point.
[+] [-] AlexandrB|3 years ago|reply
[+] [-] dmix|3 years ago|reply
https://www.statista.com/statistics/272140/employees-of-twit...
I remember it was a common meme on HN to ask what Twitter's thousands of employees did all day, even back in 2015. So maybe I'm falling into that trap. But I do still wonder.
[+] [-] Zigurd|3 years ago|reply
The debt financing burden is a further burden on Musk: twitter generates no free cash flow. Musk has to pay the creditors, and his co-investors are not likely to put in more cash. Musk and every other investor bought-in to a deal that now would be valued at about half what they paid. Depending on how the debt is secured, this also means twice the percentage of the company's value is now encumbered by that debt. That means that if Twitter were sold today the equity investors could lose nearly their entire investment.
Even a lousy LBO would be of a company you can asset-strip to reduce the debt. What could Twitter sell? The financing really does not make sense.
[+] [-] mcguire|3 years ago|reply
Cut expenses to the bone, resulting in a higher profit margin on the same revenue, coast on that revenue while dismembering the business for anything valuable, and then load any transferable debt to the carcass and declare bankruptcy?
[+] [-] Ancalagon|3 years ago|reply
[+] [-] outside1234|3 years ago|reply
So, don't accept anything that doesn't preserve your rights to your Tuesday equity grant.
Details here: https://edd.ca.gov/en/Jobs_and_Training/Layoff_Services_WARN
Key Provision: "Layoff of 50 or more employees within a 30-day period regardless of % of workforce. ...."
Penalties for Violation: "A possible civil penalty of $500 a day for each day of violation. Employees may receive back pay to be paid at employee’s final rate or 3 year average rate of compensation, whichever is higher."
[+] [-] lefstathiou|3 years ago|reply
"Employers who fail to provide notification must provide their laid-off employees with back pay and benefits for the period of the violation (which means the amount of time by which their advance notice fell short of 60 days)."
The value of ripping off the Band-Aid could easily be worth two months of severance in his mind.
[+] [-] PragmaticPulp|3 years ago|reply
I don’t see any reason to suspect they’re going to somehow violate the law and cost themselves additional fines if or when they do it. This is just about speculation about what Musk will eventually do.
[+] [-] nemo44x|3 years ago|reply
[+] [-] rr808|3 years ago|reply
[+] [-] basementcat|3 years ago|reply
[+] [-] mywittyname|3 years ago|reply
[+] [-] phpisthebest|3 years ago|reply
I beat even Elon, at this moment, does not have a full accounting of what the layoffs will be. This is all just pure media hype and nonsense with very little basis in truth or reality
[+] [-] PragmaticPulp|3 years ago|reply
Unless I’m missing something, the only sources for this article are a mix of speculation and anonymous sources who can’t even agree with each other about the layoff.
[+] [-] simonw|3 years ago|reply
There's actually quite an involved skill to reading and fully understanding this kind of writing - and it's infuriatingly difficult to pick up that skill (I've been developing it by spending time talking to professional journalists, but I'm still not there yet).
When you read "another person familiar with the deal who spoke on the condition of anonymity to discuss sensitive matters", you need to translate it to something more like the following:
The journalist who wrote this has found a credible source, who has insider knowledge.
That source has requested anonymity, and the journalist finds that request credible.
The journalist then used their skills and experience in writing about this area over the course of their career to evaluate if that source was trustworthy. They also considered if the source had their own motivations which could affect what information they chose to share and why.
The journalist may have then cross-checked that information against other sources of information to help evaluate its credibility. This becomes more important the more high stakes the claim in question becomes.
An editor (and potentially even separate fact checkers) evaluated the statement as well, and applied judgement as to whether it held up firmly enough to be published.
There are so many phrases like this in top-tier journalism. When an experienced journalist reads an article from someone else that says "a senior official in the administration said..." they can often narrow that down to just a dozen or so potential people, based on their knowledge of that beat.
As a non-journalist reading newspapers this is pretty infuriating, because there's this whole language that you need to know about in order to fully understand what's being communicated here.
[+] [-] Balgair|3 years ago|reply
WaPo isn't the best of new reporting agencies [0], but it's certainly not the worst. They do have standards and they don't make up the large majority of their data. Meaning, they have actually talked to someone that is 'familiar' with the 'deal' at some point 'last week.' It's not pure speculation on WaPo's part, though it maybe pure-unrefined-grade-A speculation on the contact's part.
If I had to bet, and many HNers out there are currently in that seat, then I'd bet on their reporting over other forms of pure speculation.
[0] https://en.wikipedia.org/wiki/The_Washington_Post#Criticism_...
[+] [-] burkaman|3 years ago|reply
- four people familiar with the discussions who spoke on the condition of anonymity
- numerous employees contacted by The Post, who spoke on the condition of anonymity
- tweets from some of the people involved
- photos obtained by The Washington Post
- A document filed with financial regulators Monday
- interviews and documents obtained by The Post
- court records
[+] [-] gamblor956|3 years ago|reply
They were told that these were performance based terminations, despite not receiving any negative evaluations during their time at Twitter. They were also told they needed to sign NDAs in order to receive any severance.
Can't confirm the %.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] hotpotamus|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] phpisthebest|3 years ago|reply
[deleted]
[+] [-] yrgulation|3 years ago|reply
[+] [-] ayewo|3 years ago|reply
1: https://news.ycombinator.com/item?id=33387722
[+] [-] kazinator|3 years ago|reply
[+] [-] jupp0r|3 years ago|reply
edit: typoz
[+] [-] herodoturtle|3 years ago|reply
> The company has yet to release a formal announcement of the acquisition. The communications department has gone silent. Rumors have swirled about layoffs, with some notices going out quietly.
Is it just me or is this headline totally misleading?
No formal announcement yet folks.
[+] [-] ajsnigrutin|3 years ago|reply
https://twitter.com/elonmusk/status/1586686935518498816
[+] [-] datalopers|3 years ago|reply
[+] [-] novaRom|3 years ago|reply
> After engineers, some of Twitter’s highest paid employees work in sales, where several earn more than $300,000
that should reduce operating expenses significantly, several hundreds of millions dollars?
[+] [-] grumple|3 years ago|reply
Terminating huge amounts of the workforce when they have next to no knowledge of the inner workings of the company... well, it's going to be a disaster, and I think all the tech people here know it. I'm sure there are some areas to cut, but they almost certainly don't know which yet. Cutting 25%, you're going to mess up. Then you have to face the reality that the other 75% will be seeking the exit - few want their workload to increase by 33%, plus work for someone as mercurial and abusive as Musk and his team, plus be a party to the dying company which will inevitably become a more effective tool of the alt-right and extremists.
[+] [-] Barrin92|3 years ago|reply