It really feels like something has cracked in the edifice of the tech industry. Elon Musk – the man whose unbridled genius went unquestioned even by his critics for so long – has seemingly flown too close to the sun and his mythos is fizzling. Google, Meta, Amazon, and the almighty Apple have introduced layoffs or hiring freezes. When I worked at Google, layoffs seemed like a distant possibility. In theory, any company could go through layoffs. But a Big Tech company? That would only be possible in the The Upside Down.
Meta – which one year ago was worth $1 trillion – laid off 11,000 people this week. This is in many ways a much bigger story than the ongoing fiasco at Twitter, where half of the workforce was laid off. Meta was one of the most successful companies, one of the most secure jobs in the industry. It was a place you went to coast while taking advantage of the generous parental leave when your kids were born. Now it’s in a downward spiral triggered by elements that were always there but dormant. The radioactivity has been released, and we have no idea where this goes. Is the Metaverse – which looks like a shitty PC computer game from the 90’s – really going to take off? The prudent wager is no, and the entire company is leveraged on this bad bet.
Another way of saying “crack in the edifice” is a “bubble bursting,” but it’s a little more nuanced than that. Most people don’t realize the impact Apple’s ad tracking privacy feature had on Facebook advertising revenue, and in turn the impact that had on the company overall.1 The ad business was no bubble. It was very real. The bubble here is the idea Facebook promoted that its value as a company went beyond ads. Now that the ads have suffered, the company is imploding and Zuckerberg is grasping for true user value that he only had to pretend existed for the last 15 years.
In a way, this is sort of similar to Musk and Twitter. Tesla, Musk’s magnum opus, is almost certainly overvalued, enriched more by fandom than fact. The Twitter acquisition was the opportunity for a fair, clean-slate test of Musk’s leadership, genius, innovation, etc. – and so far he’s failing catastrophically. In the process of exposing his own shortcomings, though, he’s exposing those of the tech industry at large. For years, the idea of Twitter’s importance made it more valuable than its actual business scheme. Now that Twitter is a private company and no longer propped up by its market price, Musk is furiously seeking real revenue streams, like charging $8/month for a the blue check “premium” service.2
Regardless of what you think of the idea of monetizing the blue check, it is a business move. It makes sense, given that Twitter doesn’t actually make enough money and a lot of its value was derived from a collective delusion about its power and importance. Sound familiar? Musk is trying to return to fundamentals without realizing he’s the king of the cloud that is this entire industry.
Now I will say something about this tweet (which by the way seems to be intermittently available and not available to view – all those layoffs maybe having an effect after all!).
This woman seems to be a product or project manager in charge of this ill-fated blue check effort. She got a lot of shit for this tweet, which shows her sleeping in the office while presumably working long hours on the project. The day after she posted this photo, Twitter leadership announced that half the workforce would be cut. These people don’t care about you, and the work is not noble. What’s sad to me about this photo is that it speaks to how badly people want to feel like they’re part of something great. This idea of greatness pervades the tech industry. It is the cloud material that makes up Elon’s cloud castle. But tech has not been the leading global industry in recent decades because of the import of its work. This is a lie we tech workers told ourselves to feel like we were part of an intrepid movement. Tech has consumed the marketplace, our politics, and our daily lives because it makes a lot of money. This fact, more than anything, is the bubble that needs bursting – so we can return to reality and get on with our lives.
Ads make up 97% of Meta's total revenue.
It doesn’t help that advertisers have started backing out of their deals with Twitter due to Musk’s volatility.