User-Led Rebellion Erupts on Reddit as CEO Acknowledges Elon Musk’s Influence
Amid a user-led rebellion on Reddit, it appears that Elon Musk, the owner of Twitter, may have exerted his influence on Reddit’s CEO, leading to significant changes on the platform. In an interview with NBC News on Thursday, Reddit C.E.O. Steve Huffman commended Musk’s aggressive cost-cutting measures and staff reductions at Twitter, revealing that he had engaged in conversations with Musk on managing an internet platform.
Huffman admired Musk’s approach to Twitter, which he acquired last year, and viewed it as a potential model for Reddit to emulate. “To put it simply, my takeaway from Twitter and Elon’s tenure there is that it reaffirms our ability to build a highly successful business within our domain and scale,” Huffman stated. He added, “While they chose a more dramatic path, I cannot deny that we are also considering significant opportunities.”
Musk surprised many in Silicon Valley with his extensive cost-cutting strategies at Twitter, resulting in mass layoffs and tumultuous decisions that cast doubts on the platform’s ability to remain operational. However, Huffman is determined to transform Reddit into a profitable venture after years of financial losses, despite its influential status within internet culture.
The current user-led protests on Reddit emerged as a response to a part of Huffman’s business plan, which involves the potential implementation of substantial fees for tech companies to access Reddit’s data. In a demonstration of their discontent, volunteer moderators, who oversee various Reddit communities, restricted access to significant portions of the platform, rendering them inaccessible to most users.
Huffman identified one area where Musk’s influence had a clear impact: job cuts. He expressed his longstanding curiosity as to why Twitter, under previous management, struggled to maintain consistent profitability despite generating $5.1 billion in revenue in 2021. “As a company with revenue under $1 billion, I often wondered why Twitter couldn’t achieve breakeven at $4 or $5 billion. What aspects of their business eluded our understanding? Because, in my opinion, we should be able to accomplish that quite handsomely,” Huffman remarked. He further emphasized that Musk’s example demonstrated the potential for running a company with a massive user base and generating revenue from advertisements while maintaining a leaner workforce.
While Musk eventually rehired some employees, Twitter’s corporate headcount remains significantly lower than before the acquisition. Musk also implemented severe cost-cutting measures, such as neglecting certain financial obligations, including rent payments, which resulted in an eviction order in Colorado. Huffman acknowledged that Twitter’s profitability remained uncertain due to the departure of some advertisers, but he highlighted the lesson learned regarding the existence of viable businesses at a similar scale.
Compared to Twitter’s extensive layoffs, Reddit’s recent downsizing has been relatively minor. The company announced a workforce reduction of approximately 5%, equivalent to 90 employees, on June 6th. Huffman did not disclose the frequency or locations of his conversations with Musk.
Twitter and Reddit are headquartered in San Francisco, and they share Fidelity as an investor. Advance Publications primarily own Reddit, the parent company of Conde Nast. As of now, there has been no response from Musk’s representatives at Twitter regarding the matter.
Huffman shed light on a common misconception among ordinary users regarding the distinction between two classes of consumer-facing tech companies: internet giants like Google and Facebook and smaller yet well-known companies such as Twitter, Snapchat, Pinterest, and Reddit. Despite appearing similar in size and success to users, the revenue gap between these categories can be substantial, with the latter often struggling to achieve consistent profitability.
While Huffman drew inspiration from Musk’s approach, he acknowledged that Reddit and Twitter differ significantly in
