Recently Salesforce CEO Marc Benioff, at the insistence of his shareholders, became the latest in a line of suitors to back away from its bid to buy Twitter.
But being left at the altar by one prospective buyer after the other is not surprising when you consider that there have been signs of the company’s decline for a while now. Attempts to reinvigorate Twitter’s iconic micro-blogging platform by allowing longer than 140-character tweets and the addition of photos as well as ads all have failed to raise the company’s sagging fortunes. And, while the recent announcement of tech investment firm Jana Partners purchase of 2.9 million shares gave Twitter’s stock a two percent boost, it did little to stem the downward spiral. (Speculators say the investment firm will either push for a major restructuring or seek another round of buyers).
In terms of tech talent alone, Twitter has dropped from first place to twentieth, according to Paysa’s CompanyRank technology. Twitter held the number one position from March 2013 to January 2015. Now Twitter has been eclipsed by Uber. The ride-hailing company shot from a rank of 847 in tech talent to occupying the top spot for tech talent within that same time frame.
Google, Airbnb, Pinterest and Facebook fill out the rest of the slots in the top five rankings of companies attracting the best in tech talent – squeezing out Twitter of its place at the top. Even Salesforce, Twitter’s most recent potential buyer, is ranked at number 10.
Tech talent often follows the money and a look at Twitter’s shrinking compensation alone shows why it is failing to attract the current crop of the best and brightest. Twitter has slipped from offering the highest salaries in March 2012 to being 19th in salaries compared with other companies hiring for similar positions.
Twitter’s average market salary of $250,000 includes a $25,000 signing bonus and $72,000 per year in equity. In contrast, Uber, the current highest ranked company, offers an average market salary of $279,000 per year, including a $16,000 signing bonus and annual equity of $118,000 based on the company’s phenomenal growth. What’s ironic is that Uber employs a total of 647 software engineers while Twitter employs over 1,000. Nearly half of Twitter’s software engineers, 477, are listed as senior software engineers compared to about 299 at Uber. Being top-heavy with senior staff salaries combined with poor stock performance may have contributed to Twitter’s woes.
For sake of additional comparison, a signing bonus of $23,000 and annual equity of $105,000 even put the average market salary for Airbnb, ranked number 2, at $271,000, compared to Twitter’s market average of $250,000.
Reputation is an intangible but important asset even for a tech company in attracting and retaining top talent. Twitter’s lack of filters and controls to screen out abuse and haters reportedly is a big factor in sending employees to the exits. It also was a key reason Salesforce’s shareholders put the brakes on Benioff’s interest in pursuing an acquisition of Twitter. Twitter’s hands-off attitude on user posts became a flashpoint during the recent elections and increased the reputation risk for companies who were considering associations with Twitter.
Other reasons that may be deterring top tech talent from joining Twitter at this uncertain time include the departure of four out of ten senior leaders last year and Twitter’s recent decision to cut staff by nine percent as well as to shut down Vine, its once popular six second video-sharing platform. Although Vine recently lost users to SnapChat as well as to Instagram and Facebook when these two services added video sharing, the outcry that occurred when Twitter announced its plans to kill Vine has at least resulted in a change of heart. The company is now looking to sell Vine instead of axing it altogether. Still, Twitter’s readiness to do away with Vine signals that Twitter has little awareness of what floats the boat of its own users. This is only a symptom of bigger problems, which are driving down the company’s ability to attract not only buyers – but leading performers across the entire talent spectrum. Can a turnaround be possible? Only time will tell.
Paysa Analyst & Writer