by UnHerd Staff
Friday, 6
January 2023
Video
16:22

David Sacks: the tech reset has only just begun

The PayPal co-founder predicts that Elon Musk has started a great reckoning
by UnHerd Staff

As the cheap money era draws to a close, perhaps no industry has been worse affected than the tech sector. Last year, there were nearly 100,000 job cuts — an astonishing 649% increase from the nearly 13,000 tech jobs that were cut in 2021. And this year the picture doesn’t look much rosier: from Apple to Amazon (which cut a further 18,000 employees this week), job cuts are happening across the board.

So where does this leave Twitter’s new chief, Elon Musk? Like other tech CEOs, the entrepreneur has announced a significant reduction to his new workforce, with reports suggesting that as much as 75% of employees are leaving. But astonishing as this figure may seem, Twitter has actually grown in activity and downloads under its new leadership. What could explain this?


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To find out what was really going on in the room at Twitter, UnHerd’s Freddie Sayers spoke with a key confidante and friend of Musk’s: David Sacks. Sacks has been a vocal supporter of Musk since the Tesla chief took over Twitter in October. He views these job cuts as not only necessary, but desirable: “The reality is Twitter, like a lot of companies in Silicon Valley, was very bloated and overstaffed. It was possible to cut three quarters of the employees and actually improve the performance, because you didn’t have a bunch of people working at cross-purposes getting in each other’s way.”

But this bloat is not unique to Twitter. Sacks observes that Silicon Valley is rife with government-enabled inefficiency: “The level of excess and entitlement that grew in these tech companies over the last several years was fuelled, I think, by Fed policy, by zero interest rates and free money.”

Those workers who have coasted on a wave of diversity hiring, excess capital and rapid growth are now being asked to prove their worth. For Silicon Valley’s elites, Sacks argues, this is a brutal shock to the system: “One of the reasons why there’s been so much hysteria about what Elon is doing at Twitter is he’s really cut to the core of the insecurity that a lot of these surplus elites feel. Elon is saying, ‘Listen, your job here at this company is not based on what your politics are. It’s based on what your contribution is.'”

Musk’s decision to uphold the bans on rapper Kanye West for anti-Semitism and, most recently, an account tracking his private jet have called into question his practical commitment to free speech. Sacks says that this is taking attention away from the real culprits of censorship, the legacy media: “They were cheering on the de-platforming of a sitting president, for example, the de-platforming of thousands of people they disagreed with. And now, whenever Elon makes any content moderation decision, they basically are up in arms acting like they’re free speech absolutists. I think that’s where the real hypocrisy is.”

So what next for Silicon Valley? The PayPal co-founder prescribes an overhaul of bloated corporations, but not a total anarchic revolution. The success of a digital public square requires clear moderation policies: “In my view, free speech never meant that anything goes. […] I think it would be good for social networks to ground their content moderation policies, to the extent they’re able, in First Amendment case law. And I think you can do that to create a little bit of a neutral authority.”

Whether Musk is the man for the job remains to be seen, but Sacks is optimistic that he is capable of starting a domino effect in the wider tech industry: “I think the product will be far better than it is. Two years is a long time, at the pace that Elon is moving. Look at what he’s done in the last two months. So I think the product will be different. And I’d say radically better.”

Thanks as ever to David for his time.

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Dominic Murray
Dominic Murray
1 month ago

The conveyor belt of millennials from America’s liberal arts colleges has swollen the ranks of the tech companies with bureaucrats and content moderators, as opposed to actual tech developers (e.g. real coders) and content producers.  Those tech companies now more closely mirror large, low performing public sector bodies.

Lesley van Reenen
Lesley van Reenen
1 month ago
Reply to  Dominic Murray

I only watched this today and consider it a must watch.
David Sacks is intelligent, experienced, knowledgable and articulate and very importantly, knows the man behind the story.
The most chilling comment was that we now know for sure that the government is controlling the media, yet still the progressives call the Twitter Files a ‘nothing burger’.
I will continue to make calls for Unherd to post informed articles about the Twitter Files…. not written by the Google/Microsoft guy.

Zak Orn
Zak Orn
1 month ago

It would be a big plus if as a result of this tech companies end up restricting their hires primarily to people that are actually interested in tech work, rather than the endless stream of gobby activists who do little/no work and just make life miserable for everyone else, but I’ll believe it when I see it. I spent 5 demoralizing years in silicon valley at several large tech companies, at each one even amongst the developers there were around 50% of people you’d have been able to cut with a no loss in productivity and an improvement in morale. When you go up a level to managers/HR I wouldn’t be surprised if that number rises to 90%, the amount of people doing non-jobs is astounding.
Problem is, the tech industry is already completely infested with these people, and with the hiring/firing decisions generally being made by the ideologically warped HR departments I suspect they’ll just end up firing the good people and keeping the useless ones.
Working in silicon valley went from being my dream to being a nightmare in 5 short years, glad I got out.

Last edited 1 month ago by Zak Orn
Phillip Arundel
Phillip Arundel
1 month ago
Reply to  Zak Orn

It is all so Douglas Adams, ‘Hitchhikers Guide to the Universe’ and Arc B

”The Golgafrinchan Ark Fleet Ship B was a way of removing the basically useless citizens from the planet of Golgafrincham. A variety of stories were formed about the doom of the planet, such as blowing up, crashing into the sun or being eaten by a mutant star goat. The ship was filled with all the middlemen of Golgafrincham,”

Phillip Arundel
Phillip Arundel
1 month ago

I can see Musk using the ‘Mutant Star Goat’ story to get them all marching off…..the typical Liberal Arts University graduate, West Coast, Liberal Lefty, believes a lot more improbable things than that; as we can see from the results of their voting habits and social policy backing, and lifestyle choices.

Jim Veenbaas
Jim Veenbaas
1 month ago
Reply to  Zak Orn

Interesting comment. Can you describe specifically what drove you out? Totally get it if you can’t.

Last edited 1 month ago by clearmedia
Julian Farrows
Julian Farrows
1 month ago
Reply to  Zak Orn

Your comment puts me in mind of this article that I read sometime ago. It’s about a computer game studio, but I from my own experiences I think this could be applied to other tech companies too:

Darkpaw Studio Head and LGBTQ Activist Jennifer Chan Reveals the Existence of Daybreak Games’ Diversity, Inclusion, and Equity Initiative

Jeff Cunningham
Jeff Cunningham
1 month ago
Reply to  Zak Orn

My career was tech (mostly in aerospace) and in all quarters of it it was always the case that among any ten people, two or three were responsible for nearly everything that was accomplished. Four or five did very little. I would just summarize by invoking “Pareto Principal” but that leaves out the one or two people who are always up to active harm and setback. Firing the latter would have resulted in further accomplishment.

One company – Boeing – decided they needed a reduction in the engineering force back in the early nineties. Their method? It wasn’t to drop that under/counter performing minority. It was to get rid of their more expensive, older engineers close to retirement by offering a one time golden handshake with a reduced retirement age by five years. The manager I worked for at the time (a geophysics PhD) sadly shook his head when telling me he was losing two of his most brilliant and productive employees as a result. “They can go find jobs anywhere, easily, and have a pension and cash on top of it. The people I’d like to fire won’t leave, and because of the union I can’t make them.” So what Boeing had done was set up an exit incentive that filtered for quality. It is no wonder to me that in the decades that followed Boeing’s longstanding reputation for quality sank into mishaps and scandals.

One of the exiting members of that staff took advantage of his retirement handshake to change fields; he volunteered in a University of Washington biomedical lab that was working on the human genome project. He told me he had to start out as a volunteer to get his foot in the door, his PhD in Mathematics (analytic geometry) and Boeing research experience being worth nothing to them. I noticed by the early 2000’s that googling would turn up his name among coauthors of an increasing number of papers in that field. I’m going to assume they were probably paying him by that time.

Dan Steele
Dan Steele
18 days ago

Boeing Defense ’88-90, Commercial Aircraft ’90-’92;
It was the shift from being run by engineers to beancounters, starting w/the McDonnel Douglas merger in ’97. https://finance.yahoo.com/news/1997-merger-paved-way-boeing-090042193.html

Jeff Cunningham
Jeff Cunningham
8 days ago
Reply to  Dan Steele

Exactly. It wasn’t a merger, it was McD buying Boeing with Boeing’s money. McD dominated the c-suite after that.

Justin Clark
Justin Clark
29 days ago
Reply to  Zak Orn

Most job portals (applicant tracking systems ATS) used by SV tech corps have a) min and max sliders… so I want someone 5 years min experience but max 15…ageist… and b) APIs that enable social media assessments to feed into the sliders… filter or include, directly or indirectly, candidates associated with….
These complete workflow systems (ATS, HR portals, Training/Re-education DEI) have infiltrated UK companies (i.e. Software as a Service) and that’s why we have that US stuff happening all over here…

J Bryant
J Bryant
1 month ago

Really enjoyed this interview. Thanks, Unherd.
There are so many questions surrounding Musk’s acquisition of Twitter. For example, he basically outed the FBI, the national security apparatus, and the Democratic administration, for their role in censoring speech. Will there be blowback for doing this? The Biden administration could make life tough for Elon’s many businesses.
David Sacks mentioned that Twitter 1.0 execs stated before a Congressional committee that Twitter didn’t shadow ban anyone. We now know that to be a lie. So far as I know, testifying before a Congressional committee is done under oath and lying is the equivalent of perjury in a courtroom. Will the Republicans push for an investigation into these and other lies by big Tech execs (I’m pretty sure I know the answer to that question)?
How does Musk manage his relationship with the US government? On the one hand he’s exposing their manipulation of social media which was potentially a First Amendment violation. On the other hand he relies on the US government in many ways to facilitate his businesses, especially manufacturing in China. He’s also a major job creator and the most effective manufacturer of electric vehicles which are favored by Biden’s pro-climate policies. How does the Biden administration view him? Friend or foe?

D Walsh
D Walsh
1 month ago
Reply to  J Bryant

Good question, Biden doesn’t seem to like Musk/Tesla. and the woke left hate him now too

On the other hand NASA and the DOD need SpaceX to access LEO and beyond. So Musk will be ok for now

Jeff Cunningham
Jeff Cunningham
1 month ago
Reply to  J Bryant

If the Clintons were involved in any of this he’d probably be dead. Suicide or freak private jet accident.

D Walsh
D Walsh
1 month ago

Well done to Elon, he really is totally owning the Libs

And it only cost him $40 billion

Douglas Proudfoot
Douglas Proudfoot
30 days ago
Reply to  D Walsh

I think Elon rightly saw this as a way to immortality in history by saving free speech. I don’t think it’s about the money for him. That said, I think Twitter will be profitable for Musk. However, the political damage to Tesla, and perhaps Spacex, will probably offset any Twitter gains.

Jim Veenbaas
Jim Veenbaas
1 month ago

So doesn’t this make the case then for breaking up these tech conglomerates? Only companies with a monopoly can afford to be so overstaffed.

Yet Twitter was barely making any profit, if any at all, and it still managed to create a bloated workforce. You think mngt would have been cutting every corner possible to reduce costs.

Douglas Proudfoot
Douglas Proudfoot
30 days ago
Reply to  Jim Veenbaas

Your assumption that the management of BigTech companies are profit maximizers is touching. Twitter management made plenty of money, so they could ignore their fiduciary duties and serve their ideology. They got to be on “the right side of history,” which was far more important to them.

Fran Martinez
Fran Martinez
1 month ago

‘usurped by nameless permanent government actors’ that is really scary

Phillip Arundel
Phillip Arundel
1 month ago

According to Dr Malone Twitter, like Facebook, Tick-Tock, Google, et-al, are merely 5th Generation Military assets. They were designed, funded, created, owned, and used, by the different secret Police – CIA, DOD, FBI, CCP.

Search on fifth generation warfare – A Carrier Battle Group is a Kinetic-War Asset (kinetic war is a shooting war, 5th gen war is info war) Twitter and the others are 5th Gen war asset.

So here is Malone explaining how Twitter is a military weapon, not a business..https://www.youtube.com/watch?v=TXg9wcHk1_E but just the intro – the full link I post gets deleted.

You would have to pay Epoch Times to see the whole thing, or find it on ‘Rumble’. I try again

P.S. Unherd – if you watch the show in its entirety Malone and Jan Jekielek talk of UNHERD very glowingly – and absolutely Praise Mary and her writing – say she is a real light, even show part of her writing.

Rob N
Rob N
29 days ago

Seems almost everyone here thinks Mary (presume Harrington) is one of the best, if not the best, writer that Unherd has. Always struggle to comprehend how she can write so many educated, researched, erudite, informative yet interesting articles.

Phillip Arundel
Phillip Arundel
1 month ago

So My very long comment on all this was deleted. Come on Unherd – you censor a very long and thought out and full of top quality links post – on Censorship, on an article on censorship? One which was about Twitter?
I will try again – but obviously you do not do as you say.
You hit a new low.

Phillip Arundel
Phillip Arundel
1 month ago

no they will not allow my link. This place is censored and I assume I am to be banned – do not think for all their talk of censorship they are any better…

N Ham
N Ham
30 days ago

Perhaps it’s because this is a section for comments on the above article, not for a personal dissertation with links and a bibliography.

Mark Phillips
Mark Phillips
29 days ago

I do so wish that Freddie Sayers would stop waving his hands around and learn to speak without casting spells or conducting the Flight of the Bumblebee. It is very annoying.

Max Beran
Max Beran
30 days ago

Did he really believe all those fulsome and supportive answers? I noticed he did a lot of swallowing of his words as he spoke them. Just a mannerism, maybe?