Trimming public company fat

Why is Elon Musk saying that he may/will cut 5,600 of Twitter’s 7,500 (75%) workforce?

It is simple. Save costs because the company is too ‘fat’.

Because in the absence of a major shareholder or founding executive, public companies are often run with some largesse in attempts to increase productivity or roll out products so to increase revenue, in order to satisfy stock analysts and shareholders.

Musk is gonna trim some fat.

When companies are private, they are run leaner.

There are some conundrums though.

I don’t know why Meta (Facebook) has 72,000 employees nor why Spotify and Airbnb each have 6,000.

The former is cutting 15,000 jobs soon. Airbnb cut 25% or 1,900 employees in May 2020.

All three have majority or a founder as CEO, yet they have more employees than what I think is logical.

I bet if they were private companies, they would have a lot less headcount.

October 28, 2022

by Rob Zdravevski

rob@karriasset.com.au

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