The thing about Infra - is that if all you want is 99% uptime - that's, with reasonable architectural decisions - relatively straightforward. You can run with a skeleton crew (particularly if you make really smart Infra Decisions like Midjourney, Whatsapp, others have done an outsource 95%+ of your infra to a third party (Discord, Platform Messaging APIs).
As time goes on though, and you go through incident review after incident review, and sharpen things up - and 99% becomes 99.9% you start to get diminishing returns on more Infra Employees - at some point they don't add much reliability value (but boy do they make pager rotation schedules pretty nice).
My sense (from both interviewing and working with them) is that the vast majority of people fired/laid off from Twitter weren't (for the most part - definitely lots of exceptions) core engineers or core infra-people -they were people on the periphery associated with making Twitter a friendly place for advertisers, and just maintaining a healthy work-life balance for the Infra people - a job where you could work your 30-32/hours week without it becoming all encompassing.
When they were fired, Twitter became a very unfriendly place, and the advertisers ran away, and the revenue crashed.
Musk took a bunch of outside money during the buyout so they're still reporting results to e.g. Fidelity and other debtholders. Hence why we broadly know that investors have lost >70% of their money: https://x.com/danprimack/status/1774456271871033823
They just announced an anti-trust lawsuit regarding what they say is a coordinated effort to remove advertisers from the site. Not advocating one way or the other as to the merits of the claim but an interesting development regarding the revenue drop you mentioned.
Companies have to be sensitive to the overton window of their customers. You make a mistake - it can be expensive. Let's ignore X/Twitter for a second - look at what happened to one of ABInBev's brands, Bud Light. They stepped outside that window and got smacked down pretty quickly.
I still don't understand why Musk believes he can dictate to his customers who they should do business with. I can kind of understand regulating what vendors do when interacting, particularly with (for the most part) completely powerless customers caught up in monopolies. But I'm looking forward to digging into the theory of law which suggests that vendors can regulate who/what type of business their customers do.
I've heard of Monosopny's - but it just doesn't feel like there is a "single buyer" in this scenario - and, companies are really, really profit seeking - if there was an opportunity for them to make a lot of money by advertising on Twitter/X, and increasing their revenue, and therefore their stock - I challenge you go find me 1 CFO/VP Marketing in 100 who wouldn't jump at the chance. Their political views would be irrelevant.
The problem is - when all these trust and safety and advertising people were let go -their was nobody left to reassure those CFO/VP Marketing types that something horrible wouldn't happen to their brand on Twitter/X. So they just decided to play it safe until things shook out.
This lawsuit is ridiculous. If Twitter can sue companies for not advertising, can Tesla sue people for buying vehicles not made by Tesla? Can Google sue companies for advertising on Bing? Can Rivian sue Tesla buyers for not buying Rivians?
The whole notion that Twitter is owed a share of advertising spend (based on what?) is absurd.
Don't forget that 2022 was still a good time for tech with people recovering from COVID lockdowns. It's not really much of a surprise that they're back to pre-COVID income.
Aside from that, there's the lawsuit the sibling mentioned, plus the coordinated campaigns from groups like Media Matters and others attempting to scare advertisers away.
Those numbers don't mean anything. Revenue does not equal profit.
Tesla makes double what GM makes with a 1/3 of the revenue. Twitter was always a money loser. If they made $661M in revenue, but lost 700m, and now they make $114M a quarter with $80M in profits, i wouldn't call that a dramatic collapse but rather a dramatic revival.
Quote profit not revenue when it comes to Elon Companies.
> now they make $114M a quarter with $80M in profits
> Quote profit not revenue when it comes to Elon Companies.
Notably, the company does not release audited financials anymore. If the company were able to go from breakeven to netting 80% margins, great. But nobody should believe such a turnaround without evidence.
Separately, if the company were netting $320mm annually (using your hypothetical), AND we assign the P/E of best-in-class Meta (which is growing, not shrinking), the company would be worth $8B[1]. Under these generous assumptions, Musk has presided over a $36B (82%) destruction of value in under 2 years.
1 - That's not accounting for the outstanding debt used to finance the deal. Including that makes the value of the enterprise negative.
That's a pretty dramatic collapse.
The thing about Infra - is that if all you want is 99% uptime - that's, with reasonable architectural decisions - relatively straightforward. You can run with a skeleton crew (particularly if you make really smart Infra Decisions like Midjourney, Whatsapp, others have done an outsource 95%+ of your infra to a third party (Discord, Platform Messaging APIs).
As time goes on though, and you go through incident review after incident review, and sharpen things up - and 99% becomes 99.9% you start to get diminishing returns on more Infra Employees - at some point they don't add much reliability value (but boy do they make pager rotation schedules pretty nice).
My sense (from both interviewing and working with them) is that the vast majority of people fired/laid off from Twitter weren't (for the most part - definitely lots of exceptions) core engineers or core infra-people -they were people on the periphery associated with making Twitter a friendly place for advertisers, and just maintaining a healthy work-life balance for the Infra people - a job where you could work your 30-32/hours week without it becoming all encompassing.
When they were fired, Twitter became a very unfriendly place, and the advertisers ran away, and the revenue crashed.