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Comment by _fizz_buzz_ | Hacker News Reader

I think the problem is, that if Twitter has already grown-up, then it has turned out that they don't have a viable business model. They lost almost $500 million last year and I don't think they have ever been profitable. That's only acceptable if investors see future growth.

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Twitter's business model is totally viable - their problem is that they're wasting loads of money they don't have to.

Where?

How about their massive payroll?

Is that really enough to safe Twitter? They are currently losing $500,000,000 per year, and they have 4000 employees.

Even if the average employee make $125,000 per year, they would have to fire EVERYONE. While it may not hurt to cut the number of staff, they'd also need to rethink pretty much every other aspect of their operation.

Twitter employs 3,898 people according to Wikipedia. Assuming everyone makes $125K (a stretch, according to Glassdoor that's the bottom of their range), their payroll is $487M. Benefits on top of that is another $122M, conservatively. You do NOT need 3,898 people to run an outfit like Twitter. They could easily lay off 3500 people and have more than enough left over to operate a sustainable, profitable product for years.

Twitter had more than $2 billion in revenue last year. You don't think that's enough money to run a service like Twitter?

Well yes, but apparently it's not. $2 billion in revenue and they still manage to lose $500 million. So the cost of running Twitter is $2.5 billion.

Do people not understand that revenue isn't the same as profit?

When Facebook bought Instagram, there were fewer than 20 people working there. Twitter has 3,000 employees. I'm thinking Twitter can do a lot to cut their SG&A expenses.

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