Elon Musk Purchased Twitter for $44 Billion and Laid Off 80% of Its Workforce. Two Years Later, He’s Still Bragging About It

President-elect Donald Trump has given X owner Elon Musk the challenging task of reducing federal spending through a newly created advisory body known as the Department of Government Efficiency, or DOGE. It’s not going to be easy.

Musk is experienced in streamlining organizations. A user recently brought this up in an X post, which stated: “Elon Musk fired 90% of Twitter staff and it is functioning better.” The user also included the popular meme of the monkey giving the side eye, implying government employees might be next.

Personnel Cuts at X

The message in the meme above refers to when Musk acquired Twitter for $44 billion and implemented an aggressive policy of cuts. Within a few months, 80% of the original workforce of 7,500 employees were dismissed, leaving just over 1,300 employees.

The meme didn’t go unnoticed and even prompted Musk to respond. He said, “80%, but the point remains valid.” His new goal is to implement a similar reduction strategy for the U.S. federal government. During Trump’s presidential campaign, he promised to cut spending by about $2 trillion.

One of Musk’s first actions after purchasing Twitter was to eliminate the content moderation team. This decision has subsequently led to issues in countries like Brazil and Australia, which have laws requiring infrastructure to combat fake news and misinformation.

To facilitate the remainder of the layoffs, Musk applied the so-called Ringelmann effect to form work teams. This phenomenon suggests that adding more personnel to a department doesn’t increase efficiency in proportion to the number of workers but rather spreads the workload. As a result, Musk aims to minimize the number of staff in his companies as much as possible.

Out of Control

Among Musk’s employees and collaborators is a concept known as the “Musk Algorithm,” which is applied to any area of the company requiring optimization. Essentially, it involves eliminating as much as possible from departments, products, processes, etc. According to Musk, “If you do not end up adding back at least 10% of [the elements of the process you’ve eliminated], then you didn’t delete enough.”

This approach has led to Musk needing to rehire some members of the Twitter moderation team that he had previously laid off. Just a few months ago, he faced a similar situation with workers from Tesla’s Supercharger department. He had dismissed them just days earlier due to overstaffing, ultimately causing the department to collapse.

One result of the massive layoffs at Twitter is that strategic departments, such as X Security, now only have 20 employees, which doesn’t seem to concern Musk at all.

Since he took control of X, user traffic has increased, yet the number of registered users has declined. According to data from Statista, the user count dropped from 368.4 million in 2022 to 335.7 million in the first quarter of 2024. Notably, this decline doesn’t take into account the recent exodus of users to other social media platforms like Bluesky.

Image | Thomas Hawk | Kelly Sikkema

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