I think the opposite. Many softwares at its best when the team was small. Software companies have to hire many people because it needs to report growth to investors, headcount is one of the measurement of growth. It is not necessarily good for the product, actually many times, it hurts the product, but overall it is good for the company, the company will enter new areas, can explore new things.
What Twitter is doing is to scale down first, focus on the product, and once it gains traction, it definitely can scale up again. I don't think it will hurt the product very much.
> Software companies have to hire many people because it needs to report growth to investors, headcount is one of the measurement of growth.
I don't think you have a good understanding on how those companies are growing and scaling out. Don't take growth for the granted. "Right product" or "Right technology" won't give you that. It only comes from solving thousands of very specific, never-ending customer problems. If you do B2B, you need to spend most of your time on very specific requests from priority customers. And they are not one, but hundreds of them if you targets $xB business. It's just physically impossible to keep up with a small team even with a very aggressive prioritization.
Still not convinced? Google has a notoriously bad reputation for their customer supports and it's primarily because of their tendency of keeping "inessential headcounts" low as possible. And think about how many cloud customers they lost to AWS and Azure. TK came to GCP and his first work was adding an army of sales and account managers. This almost immediately yielded a rapid acceleration of the platform, although it's too late to catch up.
Scaling back up is really hard though. We had a de facto freeze on hiring (not exactly hiring freeze; more of a headcount cap) just shy of a decade ago to focus on our product. During that time, some of our best recruiters left because they basically had nothing to do anymore.
The freeze worked: we got rid of some products that weren't getting traction and were able to improve the products that did have traction. But the cost of the freeze lingered for at least a year; it reset the hiring pipeline, we couldn't grow fast when we needed to because the limited number of recruiters we had were already overworked, and the limited number of engineers had to balance interviewing needs with their real work. This all happened when my employer was <10% of its current size and pre-IPO, and we didn't even take a headcount reduction.
Twitter is simply at a different scale. 7500 -> 2500 employees is a 66% reduction. Going 2500 -> 7500 is a 200% increase. Recruiting is likely totally gutted, and the current 2500 employees have to support systems previously maintained by a 7500-person company. If they decide they need to grow, it'll have to restart at a snail's pace, and they'll have to make sacrifices on feature development or stability along the way.
Edit: for what it's worth, the fastest way to regrow back 200% is to rehire the people laid off. But, given that I happened to interview earlier today an ex-Twitter candidate who didn't make it through the Elon snap, that route is rapidly closing up.
It is not only hard, it also may or may not work. It is the same process Twitter has already went through years ago. I have simplified the issue and talked only about the product. I don't disagree with you.
This is not a trivial task. With such a heavy reduction and how entire teams have been completely decimated, there will be a lot of lost knowledge. I'm sure there will even be cases where the people who stay don't even know what knowledge was lost.
All that puts Twitter in a very risky position, specially in a product of such complexity that does a lot of things in-house. It shouldn't be underestimated.
> Software companies have to hire many people because it needs to report growth to investors, headcount is one of the measurement of growth.
I mean this is just wrong. Companies are always under pressure to cut costs (employees) and it is always talked about when quarterly results are posted. Look at how the market reacted to Facebook's latest results and then again what happened when they laid off thousands of staff.
What Twitter is doing is to scale down first, focus on the product, and once it gains traction, it definitely can scale up again. I don't think it will hurt the product very much.