Twitter implements a hiring freeze

In case you missed it, Elon Musk is buying Twitter for $44 billion. While is yet to be finalized – Musk has admitted he needs to find sufficient financing – Twitter’s senior leadership is gearing up for the takeover.

In a memo to employees, CEO Parag Agrawal shared that Twitter is implementing a hiring freeze as part of cost-cutting efforts. The social media giant may also rescind job offers to candidates and limit spending on travel and consulting, according to Bloomberg who has seen a copy of the memo.

Business Insider confirmed this news with a Twitter spokesperson. Their statement said: "Effective this week, we are pausing most hiring and backfills, except for business-critical roles.

“We are pulling back on non-labor costs to ensure we are being responsible and efficient.”

At the same time, Agrawal announced two senior leaders have been asked to step down – these include head of consumer product Kayvon Beykpour and revenue product head Bruce Falck.

Beykpour tweeted:

https://twitter.com/kayvz/status/1524787800863744002?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1524787801757126656%7Ctwgr%5E%7Ctwcon%5Es2_&ref_url=https%3A%2F%2Fwww.businessinsider.com%2Ftwitter-mostly-freezes-hiring-loses-two-executives-2022-5

While Falck’s twitter bio now states he is unemployed. He shared on twitter:

https://twitter.com/boo/status/1524795027125198852?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1524795027125198852%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.businessinsider.com%2Ftwitter-mostly-freezes-hiring-loses-two-executives-2022-5

Agrawal also shared in the memo that while Twitter was not currently considering job cuts, senior leadership would need to drive efficiencies to ensure the social media company achieves its financial goals in the coming months.

Ahead of Musk’s takeover, it does seem that Twitter is moving some employees and teams from long-term projects onto focusing on the growth of the main app.

Inside hiring freezes at tech giants

This hiring freeze comes amid financial challenges for Twitter. While its revenue hit $1.2 billion for the first quarter (Q1) of 2022 (and increase in 16% year-on-year), its costs and expenses totaled $1.33 billion (35% higher than Q1 2021). Twitter’s net income reached $513 million.

Agrawal wrote in the memo to employees: “At the beginning of the pandemic in 2020, the decision was made to invest aggressively to deliver big growth in audience and revenue, and as a company we did not hit intermediate milestones that enable confidence in these goals.

“In order to responsibly manage the organization as we sharpen our roadmaps and our work, we need to continue to be intentional about our teams, hiring and costs.”“In order to responsibly manage the organization as we sharpen our roadmaps and our work, we need to continue to be intentional about our teams, hiring and costs.”

However, Twitter is not the only tech giant implementing hiring freezes to tackle financial challenges. Meta and Uber are doing the same.

Uber in particular attributed its change in hiring strategy to the shift in investor sentiment towards tech stocks.

Uber’s CEO Dara Khosrowshahi wrote in a letter to employees: “After earnings, I spent several days meeting investors in New York and Boston. It’s clear that the market is experiencing a seismic shift and we need to react accordingly.

He continued: “We have to make sure our unit economics work before we go big...We will treat hiring as a privilege and be deliberate about when and where we add headcount.”

How many more tech giants will follow suit?