Folks who have spent time working in SV tech companies know that for many companies (AirBnB is absolutely one) there is a knob which can be turned. The cost structures have a lot... fat. The spending in many of these places is beyond belief.
Sure, but twitter is somewhat of a litmus test for this. When twitter started trying to cut fat they also crashed their revenue.
Organizations love to accumulate fat, I don’t think anyone really has a clear idea of what is necessary fat and what isn’t. Your best bet would be getting consultants in to figure it out… who probably don’t know a heck of a lot about running a tech company.
I think we shouldn't oversubscribe twitter's failures here. If "normal" vultures had come in and done layoffs Twitter would be in a very good situation. The problem with Twitter's financials now is that it was a leveraged buyout (so now their debt obligations are much higher than they were 12 months ago), and on top of that everything is happening in order to make it toxic to advertisers.
Even before the purchase Twitter was getting to profitability quite comfortably!
Additional tests will be Salesforce, Twilio, Docusign, Facebook - all have promised efficiency from here on out. My guess is they'll all start putting up very good numbers.
Somewhat fair point. But there are entire areas (like product initiatives) that are extremely speculative and just pet projects which can be cut at many places. Google for example wasted a billion here or a billion there like it was nothing, on things that made little sense, years ago.
Salesforce has >30% EBITDA margins and annual revenue growth of 10-15%. They're massively profitable... if anything they are the aspirational benchmark nearly everyone else is trying to reach
Investors seem to be demanding cash returns from mega caps now. At a minimum - if Uber has to raise money again, we’d expect it to be in worse terms.