Linda Yaccarino was set up to fail

The buzz out of the Code Conference this week is, naturally, all about the disastrous performance of X / Twitter CEO Linda Yaccarino, who closed out the two-day affair in spectacular fashion. Vox’s Peter Kafka, who has been going to the conference since it started in 2008, called it “the weirdest session I’ve ever seen.” If I had to sum up the vibe as everyone trickled off to dinner afterward, it would be stunned disbelief. As for Yaccarino, she immediately fled the premises with her six-person security detail.

Given how her first interview on the job with CNBC went about a month ago, I had low expectations for her ability to field questions from the tough-as-nails Julia Boorstin on the Code stage. But nothing could have prepared me for how woefully unequipped she was to hold her own. There was something poetic about the Financial Times dropping a profile of her that same day with a photo in a literal crucifix pose.

If you know anything about how Yaccarino came to what is now known as X, it’s clear that she has been set up to fail. She practically begged Musk to hire her, who ended up agreeing to give her the “CEO” vanity title despite him continuing to essentially run the company. She’s invisible to the engineers and handful of product people still working at X, who report to Musk and not her.

Onstage at Code yesterday, Yaccarino was physically flustered by the surprise earlier appearance that day of Yoel Roth, Twitter’s former head of trust and safety who was fired by Musk and forced to flee his home after Musk suggested that he was a pedophile. Despite Boorstin giving her ample opportunity to address Roth at the beginning of their talk and move on, Yaccarino kept revisiting what had unfolded before her, like a criminal returning to the scene of the crime.

Throughout the conversation, she repeatedly dodged specific questions about the state of X’s business, at times revealing that she may not actually know the answers. X now has “something like” 200 to 250 million daily active users, she said at one point. She clearly didn’t know the status of Musk’s plan to enforce a stricter paywall and said it’s looking like X will turn a profit sometime early next year.

She bragged that X was hiring again, failing to mention that one of the few people just hired is apparently her son. One of my favorite moments was when she, for some reason, held up her iPhone homescreen to the crowd to reveal that the X app was nowhere to be found. Facebook and Instagram, however, were visible, along with the Holy Bible — the original super app. (This homescreen slip-up has gotten attention on the Blind channel for X employees, too.)

I’m not sure if Yaccarino and Musk were already on thin ice going into her interview this week, but it’s hard to see how they won’t be now. Her mix of combativeness and Trump-like diversion of the real questions revealed, to me, deep insecurity about her job and how she is perceived. If Musk really wants her to be CEO, he should start treating her like one. Otherwise, it’s not going to work out for either of them.

Last week, I flew up to San Francisco to interview Mark Zuckerberg at Meta’s headquarters in Menlo Park. These conversations have become somewhat of an annual tradition for us, timed to the company’s Connect conference. In a world where the biggest tech CEOs are increasingly shunning the media, I’ve appreciated Mark’s willingness to engage and let me ask whatever I want.

Fresh off an MMA training session that morning, he covered a lot of ground with me for over an hour. You can watch the full conversation, which we published yesterday, on YouTube, listen to it in the Decoder feed, or read the transcript. I went deeper into the AI news Meta announced this week in a separate story on The Verge, featuring an interview with Ahmad Al-Dahle, Meta’s VP of generative AI. (I’ll have more thoughts on the implications of Meta’s AI assistant and characters later.)

Thanks to all of you who have already reached out about enjoying the Zuckerberg interview. Some of what he said about Elon Musk and Twitter has made headlines. (He also had a conversation with Lex Fridman this week using Meta’s ultra-realistic, high-res virtual avatars, which I got to try last year during a trip to the company’s R&D office in Redmond.)

Here are some things Zuckerberg said that stood out in our interview:

On Tuesday evening, I broke the news that Snap was about to lay off roughly 150 employees in its AR division. The next morning, the company announced that it’s axing the enterprise AR shopping group that was just unveiled in April. The idea was to sell Snap’s AR software to retailers like Nike so that their customers could virtually try on clothes and shoes.

“After exploring our options over the past few months, it became clear that it would take significant incremental investment to grow our enterprise offering for retailers and we simply cannot make that investment at this time,” CEO Evan Spiegel told employees in an internal memo announcing the cuts, which I’ve heard were decided after a detailed review of the company’s AR strategy by upper management. Jill Popelka, a former exec at the enterprise giant SAP who joined less than two years ago to lead the division (and spoke onstage at Snap’s splashy developer conference earlier this year), is out.

Given Snap’s financial position, Spiegel is right to cut back on projects that aren’t core to the business. But it’s impossible not to see these layoffs as anything other than an unforced error. “Really a shame to see another 150 people let go after 6 months because of poor leadership from the top,” Evan Orenstein, an early Snap employee, wrote on X. “Where does the buck stop?

Snap’s stock-based compensation is still through the roof, and given how its stock price has barely budged this week, I have a feeling that these cuts may not be the last.

In a recent issue of this newsletter, I said that Epic Games, the creator of Fortnite, was preparing for a significant round of layoffs. Yesterday, they were announced by CEO Tim Sweeney. Sixteen percent of employees, or about 830 people, are being laid off, along with roughly 250 leaving through the divesting of Bandcamp and SuperAwesome, two companies Epic acquired during the pandemic.

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney said in his note to employees. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”

He framed the cuts as a refocusing on the core business and noted that Fortnite’s push to share more revenue with creators and compete with Roblox has driven down margins. Laid-off employees will get accelerated stock vesting through 2024 and will be given two more years to exercise. Epic is unusual for such a large, late-stage private company in that it doesn’t issue RSUs but rather options to employees, which can be expensive to exercise. Whether employees can get liquidity soon after exercising is another issue entirely that Epic has yet to address.

As I reported before, Epic held talks to raise more money this year but recently put a round on hold. I could see these cuts as a prerequisite to raising down the line on more favorable terms, though the company isn’t saying anything about that right now.

A roundup of what else happened in the tech industry this week that you may have missed:

Some interesting career moves I noticed this week:

That’s it for this issue. I’ll be back next week. In the meantime, I’d love to hear your feedback, story ideas, and whether you also keep Settings in your iPhone dock.

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