Command Line: The mailbag issue

Below are my answers to questions that subscribers sent in over the past several weeks:

I’ve seen job listings for positions at Meta and wondered what is going on there. Did they lay off too many folks, or are they adding new people for new positions?

I’ve been hearing that lots of laid-off Metamates (Zuckerberg’s phrase, not mine) have indeed been rehired recently. Those who were laid off can even apply for new roles through a special alumni portal.

I don’t think rehires are happening because Meta laid off too many people and is now scrambling. It’s because the stock price is up 225 percent since layoffs began in November 2022. The business has rebounded, investors are confident again, and so the hiring window is open.

Meta’s employee headcount at the end of the last quarter was 71,469. That’s a decrease of 14 percent from the year-ago period, and the company noted in its last earnings report that only half of the 10,000 people it said would be laid off this year have been reported yet. There were 71,970 people employed full time at the end of 2021, which means that a year and a half of headcount growth has been reversed.

Overhiring certainly happened across the tech industry over the past couple of years, especially at the software-heavy names like Meta that thought years of growth had been pulled forward by the warped reality of pandemic lockdowns. But the reality of Meta’s cuts — and really all the Big Tech layoffs that started in late 2022 — is that they were primarily driven by short-term pressure from the stock market.

Is the “tech recession” over?

A Wall Street analyst note from Bernstein a couple weeks ago got some attention for predicting that it is, though I’m not so sure. Sure, “tech layoffs have slowed to a trickle.” But that doesn’t mean they won’t pick back up. The pain is also not evenly distributed.

Short of another cataclysmic world event, we have probably passed the peak of the bloodletting in terms of sheer numbers. Big Tech has gotten most of its cuts out of the way, and now layoffs are trickling down into startupland. As I wrote in another recent issue, there are a bunch of zombie private companies out there that raised money at astronomical valuations they’ll never be able to justify.

With interest rates where they are now, the pressure is on. More layoffs and fire sales are on the horizon for a lot of startups, especially the ones that aren’t profitable. There’s another trend at play here: will the generative AI startups currently raising crazy amounts of money — primarily for GPUs that are only going to become more commoditized over time — become successful, profitable businesses? History says that the vast majority of them will not.

Do you think recent advancements in the labor movement outside of tech will inspire a resurgence of the organizing activity that spiked in late 2022? (In the US, of course.)

I’m highly skeptical that we’ll see much coordinated organizing inside Big Tech anytime soon, mainly because of how the power dynamic has shifted. Back when Google employees were protesting the company’s plan to work with the Pentagon, the tech job market was extremely hot. CEOs quietly lived in fear of pissing off their prized engineers, who could quickly get a rival offer at a peer company.

Now, the power has swung back to management in these companies. CEOs feel empowered to crack down. Perks are getting cut left and right while remote workers are being forced back into the office. Sure, a senior engineer at Google can probably still get a job at Meta. But there are far fewer of these roles available than there were a couple of years ago. Until the rank and file feels empowered like they did back before the pandemic, I don’t think there will be a rise in organizing.

Could we get that Cambridge Analytica explainer at some point? I really got swept up in the hype at the time, and now I feel like I’m dwelling on bad info.

You’re not alone! I think a lot of people are starting to question the narrative they were fed about Facebook and Cambridge Analytica. That particular storyline, and how it was conveniently tied to Trump’s election, probably did more damage to the reputation of one company than any scandal in the history of the tech industry.

Here’s the truth: Cambridge Analytica was a scam. Its main premise was building “psychographic” profiles of people from their Facebook data, which in turn would be used to tailor political messages to sway the way they vote. Cambridge Analytica execs would later admit that these profiles were not even used for the Trump campaign. And there has been plenty of independent research showing that this approach has little, if any, effect on swaying opinion.

The Cambridge Analytica scandal did reveal something important: people want to know how their data is being used. The new regime of AI companies — many of which have been training their models under a squishy interpretation of fair use — could do themselves a solid by reflecting on that.

What’s going on with the Ray-Ban Stories 2?

In February, I reported on an internal Meta road map presentation that said its second-generation pair of smart glasses with Ray-Ban were coming this fall. They won’t be AR glasses that can project graphics onto the world around you, but they’ll be a significant upgrade to the first version. A recent report said they will be able to livestream video of what the wearer is seeing to Instagram or Facebook.

Meta claims its last pair are the bestselling smart glasses of all time, which is a pretty low bar. I’ve heard the vast majority of owners stop using them quickly. Even still, they remain on display in Ray-Ban stores. Meta’s goals for this product line are to introduce more people to the concept of smart glasses and test what works for the form factor ahead of true AR glasses, which aren’t coming until at least 2027.

What’s going to happen to X/Twitter? Is Elon really driving it into the ground?

Most of my colleagues in the tech press have written off the company formerly known as Twitter as doomed. While I certainly think Musk has been reckless with the platform and cruel to the people who worked there, I don’t think he’ll destroy the company.

Whatever your opinion of him is, there’s no denying that he can raise money out of thin air. Even with how much enterprise value he has torched in a year, I have no doubt there will still be a strong appetite to fund his regular secondary rounds for X, just like there are for SpaceX. The first round could happen this fall, so we’ll see.

Culturally, X is way less relevant as a social network than it was a year ago. I’m not sure the mainstream media and political class will ever return. But Musk may be okay with that. His creator payout strategy is making people real money to post, and as long as that’s kept up, I don’t see ruin on the near horizon.

I was recently catching up with someone who, like so many of you, is sick of Musk’s behavior but still lurking on the platform. He made the point that X feels more like the Wild West of social media, where you’ll find the edgier, more cringe stuff these days. There’s probably more lasting power for a platform that embraces that vibe than we’d all care to admit. It just won’t be a big ads business (sorry, Linda Yaccarino).

AI and Hollywood. Where does this end up?

I had coffee recently with the CEO of a generative AI startup that makes software for filmmakers. We were talking about the ongoing union strike and the fears people have about AI taking the jobs of writers and actors over time. He made the point that the Hollywood people in his private group chats were much less concerned than the voices you hear on the picket lines. AI is going to automate more parts of the creative process, but it’s nowhere near close to rendering a writers room or VFX studio obsolete.

Whether the WGA wants it to be this way or not, the people I talk to think we are eventually heading for a future that looks like this scene from the final season of Westworld, where the main character generates video game stories by merely talking to an AI. No one I talk to in Hollywood or Silicon Valley really thinks that scripts are going to be entirely AI-generated in the near future. That said, the technology will certainly abstract away certain jobs over time. The savviest players will adapt to the new reality and not spend their effort trying to keep the inevitable at bay.

How did you start? How do you get your information?

I fell into this job. It wasn’t something I thought I would be doing when I was growing up. I actually wanted to be an actor. But I was also a nerd about tech from an early age, which led me to start blogging about Apple throughout high school and college. When I graduated college, I made the decision to stick with the thing I was already doing and making money from, so I abandoned hopes of an acting career. (A good call in retrospect.)

Over time, I became more interested in the business side of technology and the personalities driving the most influential companies. I’ve now been doing this for over a decade and still love it. Journalism is a unique profession in that it gives you the ability to talk to really interesting people you would never get access to otherwise. I also love that it gives me license to dive deep on all kinds of topics and learn. For someone who is deeply curious about the world, it’s a pretty great job.

Journalism is also a relationship game. Many of my stories are the result of connections I’ve made over the years and maintained. I try to play the long game and not be transactional with people, which has paid off. A lot of people have trusted me with information that could get them fired or even sued, and I take that responsibility very seriously.

A big reason I started this newsletter is to stay in more frequent contact with my sources. Hearing your feedback and ideas is critical for me. Thanks so much for supporting my work. It means the world.

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