The return of Jack Dorsey as Twitter CEO led to an immediate 8% culling of its global workforce. Ironically, Jack has two jobs as CEO of both Twitter and Square, while 336 people now have none. At least he’s donating a good portion of his Square stock to charity!
Despite the volatility, Twitter is still above its IPO price and is still worth circa $20 billion dollars. Therefore, it is somewhat surprising that Twitter would focus on cutting product and engineering folks, the prized worker bees of Silicon Valley.
Jack wrote to his employees, “We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel.”
According to Twitter’s filing with the SEC, the estimated cash cost of the reduction in force (RIF) will be between $10 million and $20 million, or about $30K to $60K per laid-off employee, “substantially all of which will be severance costs.”
Let’s say the average laid-off employee got a severance valued at $40,000 since not 100% of the cost goes to severance. Given I wrote the book on severance negotiations, let’s try to compare Twitter’s with other severance packages.