Reddit CEO Praises Elon Musk & Twitter's Cost-cutting Moves & Layoffs Amid Backlash

About a week after Reddit went dark amid a blackout protest against the introduction of charges on third-party developers, the company's CEO has come up with lots of praise for the otherwise under-criticism Twitter.

It seems that Twitter's former CEO Elon Musk may have had an influence on Reddit¡¯s CEO ahead of changes to the website that have resulted in a user-led rebellion on the platform.

Reddit CEO Praises Elon Musk

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In an interview recently, Reddit CEO Steve Huffman praised Musk¡¯s aggressive cost-cutting and layoffs at Twitter and said he had chatted ¡°a handful of times¡± with Musk on the subject of running an internet platform.

Huffman said he saw Musk¡¯s handling of Twitter, which he purchased last year, as an example for Reddit to follow.

¡°Long story short, my takeaway from Twitter and Elon at Twitter is reaffirming that we can build a really good business in this space at our scale,¡± Huffman said, as per a CNBC report. ¡°Now, they¡¯ve taken the dramatic road,¡± he added, ¡°and I guess I can¡¯t sit here and say that we¡¯re not either, but I think there¡¯s a lot of opportunity here.¡±

Huffman is trying to turn Reddit profitable after decades as a money-losing website punching above its weight in internet culture.

What He Said About Twitter's Layoffs

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The Reddit CEO said there¡¯s one concrete area where Elon Musk¡¯s example has been clear: job cuts. He said he had often wondered why Twitter under its previous management had struggled to be profitable on a consistent basis despite revenue in 2021 of $5.1 billion.

¡°As a company smaller than theirs, sub-$1 billion in revenue, I used to look at Twitter and say, ¡®Well, why can¡¯t they break even at 4 or 5 billion in revenue? What about their business do we not understand?¡¯ Because I think we should be able to do that quite handsomely,¡± he said.

¡°And then I think one of the nonobvious things that Elon showed is what I was hoping would be true, which is: You can run a company with that many users in the ads business and break even with a lot fewer people,¡± Huffman said.

Elon Musk ended up hiring some employees back, but corporate headcount has remained well below where it was before the acquisition. Musk has also imposed other severe cost-cutting measures, such as not paying some of Twitter¡¯s bills including rent, leading to an eviction order in Colorado.

¡°They had to do some pretty violent changes and violent surgery to get there,¡± Huffman said.

Also Read: Reddit To Likely Launch IPO In Second Half Of 2023

Lesson From Twitter?

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It is not clear if Twitter is profitable because some advertisers have left, cutting into revenue, but Huffman said the lesson was on the other side of the ledger.

¡°People are talking about a lot of things on Twitter, but I think that¡¯s the part that¡¯s the most interesting from my point of view as a business person, is that they actually are good businesses at this scale,¡± he said.

Reddit¡¯s recent layoffs have been far more modest than Twitter¡¯s. The company said earlier this month that it was laying off about 5% of its workforce, or 90 employees. Meanwhile, Twitter has laid off about 70% of its nearly 7,500-strong workforce.

Also Read: Elon Musk Calls Meta 'Copycat' For Planning To Launch Twitter Rival

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