What Elon Musk’s mass firings at Twitter say about workforce headcount

Whether you love or hate him, whether you agree or not with laying off staff en masse, as Elon Musk did at Twitter (now X), those actions speak to broader workplace issues that businesses and HR managers must be across.

As shocking as it may have been, it is necessary to ask, Steve Glaveski said, whether Elon Musk was right to let go of four in five workers from Twitter, when he took over Twitter (now X).

Glaveski, the chief executive and co-founder of Collective Campus, said in a recent conversation with HR Leader that, “from a political perspective, if you ask someone on the left whether he was right to fire 80 per cent of the workforce, they’ll say no, because X has become a cesspool, and advertising revenue is way down. And then, if you ask someone from the right, they’ll say yes, because he restored free speech and the platform still up, so it didn’t hurt anyone.”

However, the bigger question to be asked, he said, is how could he have fired four in five workers at the social media giant, and two years later, have daily active users at record highs and a still-functional platform?

The conversation with Glaveski came ahead of her appearance at Bold Ideas in HR, being hosted by Captivate Q, in Sydney on 15 September. To learn more about that event, click here.

“When we reflect on how so many large organisations operate, we do find that there is a lot of waste, there are a lot of meetings that don’t need to happen,” Glaveski said.

“There is a law called Price’s Law, which suggests that the square root of an organisation’s headcount is accountable for about 50 per cent of the work done, which suggests that a lot of people just aren’t contributing. This kind of dovetails into AI: slowly but surely, we’re marching towards a world of AI agents, which can essentially replace people en masse.”

“And so, leaders will have a big question to ask themselves, which is not only how did Elon Musk manage to fire 80 per cent of the workforce, but whether they need – as AI begins to proliferate and basically reconstruct business models from the ground up – to have difficult conversations.”

“The topic of firing people is basically going to be number one on the priority list for many HR leaders, many C-suiters in the world today.”

It is human nature, Glaveski continued, to put these types of discussions on the back burner, “because who wants to fire people?”

“You’re talking about people’s livelihoods, you’re talking about relationships that have, in some cases, been cultivated over years, maybe even decades. But I think there is something to be said about having these conversations and discussions now sooner rather than later because, inevitably, we will see new organisations emerge entering categories with AI-first, business models that are way more capital-efficient and leaner at what they do,” he said.

“They become price leaders in the market, and therefore they’ll slowly but surely chip away at incumbent’s market share. And so, if you don’t have that conversation, you’re going to end up in a bad place anyway.”

“In my view, it’s best for your people, as you would in a romantic relationship, to have those difficult conversations up front, and then best prepare those people for what’s next rather than just pretend this isn’t happening.”

Looking ahead, Glaveski stressed, inaction is not an option. However, he sees green shoots across the market, in that some companies are already beginning to make the tough calls.

“Recently, Canva – which has traditionally been, you know, a darling of workplace relations and diversity, equity and inclusion campaigns – announced a wave of layoffs. But they themselves realised that AI will be replacing a fair chunk of middle management, rudimentary work, rudimentary roles further down the organisational chart. And they’re adapting to that,” he said.

“They are, of course, helping people with those redundancies and helping them with upskilling so that they can find other jobs. But I think if leading organisations, like your Canvas of the world, start to set the tone, then other organisations will inevitably, I think, hopefully follow.”

To register to attend Bold Ideas in HR, click here.