Steve Huffman said in an interview that Elon Musk's cost-cutting at Twitter was inspiring and that the two have chatted "a handful of times."
Twitter owner 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.
In an interview Thursday with NBC News, 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 Musk 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.
“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.”
Musk shocked Silicon Valley peers with his deep cost cutting at Twitter and began his ownership of the company last fall by axing most of the company’s employees in a chaotic series of decisions that left some people doubting whether Twitter would be able to stay online.
Huffman is trying to turn Reddit profitable after decades as a money-losing website punching above its weight in internet culture.
This week, influential volunteer moderators who manage the communities that make up the site walled off large parts of Reddit, making them inaccessible to most users as part of their demonstration. The protest is a response to part of Huffman’s business plan, which includes potentially charging other tech companies large fees for access to Reddit data.
Huffman said there’s one concrete area where 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 non-obvious 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.
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.
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 there actually are good businesses at this scale,” he said.
Reddit’s recent layoffs have been far more modest than Twitter’s. The company said June 6 that it was laying off about 5% of its workforce, or 90 employees.
Huffman did not say how often the chats with Musk have taken place or where they’ve happened.
Twitter and Reddit are both headquartered in San Francisco, and the privately held companies both share Fidelity as an investor. Reddit is majority-owned by Advance Publications, the parent company of Conde Nast, according to CNBC.
Musk’s representatives at Twitter did not immediately respond to a request for comment Friday.
Huffman said that many ordinary people do not realize that there are “two classes of company” in the world of consumer-facing tech businesses: There’s internet heavies such as Google and Facebook, and then there are much smaller but still well-known companies such as Twitter, Snapchat, Pinterest and Reddit.
“From a user’s point of view, you’re like, ‘Oh, they’re just as big. They’re just as successful. You know, maybe a little less so,’” Huffman said.
“But you wouldn’t realize that it’s like a 20, 30x difference in revenue. And, you know, not really profitable — maybe a quarter here or there,” he said.
Twitter had $5 billion in revenue in 2021, the year before Musk’s acquisition. Meta, the owner of Instagram and Facebook, reported revenue that year of $117.9 billion. Alphabet, the owner of Google, reported revenue that year of $257.6 billion.
Huffman said he has not adopted Musk’s thinking across the board.
“There’s a lot of other things where our platforms are just different — how they think about moderation versus us,” he said.
He didn’t cite examples. A Reddit spokesperson Friday declined to cite any specifics but said Reddit is different in multiple ways, including that ordinary users have the power to upvote and downvote posts.
One specific difference is their handling of former President Donald Trump and his supporters. While Musk reinstated Trump’s Twitter account, which prior management had suspended after the Jan. 6 assault on the U.S. Capitol, Reddit has kept in place its ban on the subreddit r/the_donald, a gathering spot for Trump’s supporters.
Elsewhere in the interview with NBC News, Huffman criticized the organizers of this week’s blackout, saying he wanted to pursue rules changes that would allow ordinary Reddit users to vote them out. He compared the long-tenured, difficult-to-oust moderators as “landed gentry,” and some moderators fear Huffman may force them out.
That someone looks at how Elon handled Twitter and goes ""Yes! that's exactly what I want to do." is wild. I have no words, but it does explain so much of how things have gone down.
My goodness, so it didn't just feel like Huffman was a discount Elon but that's literally what he is aspiring to?
I don't know what could be more pathetic than the MBA*hole emulating the Blood Emerald Silverspoon Kid Without Skills.
Reddit is so going down the drain, the downward cycle was palpable over the last years but now they're accelerating with Mach 3.
Elon Musk cuts costs by not paying operating expenses or his employees. If that's what you want to emulate, congratulations! Your soul has been completely devoured by corporate America.
I'm coming to conclusion that corperations sometime have an almost pro-wrestling outlook and make their CEO's heels. Again and again, CEO's make themselves publicly quite villainous, the company fires them, then rolls back 5% of their unpopular decisions in the name of "good will". I will be shocked if spez has this job in 3 months and both reddit and spez will be richer for it.
What all this has highlighted for me (and clearly a bunch of other people) is just how little friction is required for me to say “eh, I could live without [reddit | twitter]. Switch to a different app? No thanks. That’s no effort. I deployed my own Lemmy instance and figured out the fediverse instead of downloading the official Reddit app from the App Store. I think that shows how little loyalty some people have to these centralized platforms.
Huffman said he saw Musk’s handling of Twitter, which Musk purchased last year, as an example for Reddit to follow.
Is this man mentally ill? Is he deliberately trying to get himself fired?
A big reason Musk has gotten away with things so far is because he spent years making himself famous. He’s also among the richest people in America. Even if they don’t like him, people will cut him some slack (up to a point) because he’s Elon Fucking Musk.
It’s even his name is in the title of this article, because nobody knows or cares who Steve Huffman is. Until you get into the article itself, Huffman is referred to as “Reddit CEO”.
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.
I feel like framing not paying bills as 'cost-cutting' is perhaps a bit kind.
It's laughable that Huffman thinks people don't realize how much smaller Reddit is than Google or Facebook.
Most of what Huffman said here is about cost-cutting. If Reddit had 1800 employees before the layoffs, then yes, it's probably bloated and laying off another 800 employees probably wouldn't affect the end-user experience.
The problem remains that Huffman sees how users want to use Reddit as bad for the company. There doesn't seem to be any reason why Reddit couldn't have monetized their API through ads, making third party apps similarly profitable as their own app. And if their own app isn't profitable through ads, then what's their plan? Moving all those users to their first party app doesn't fix anything.
Even from a purely capitalistic viewpoint, what kind of lunatic would hitch his wagon to a company that is estimated to be worth 1/3rd of what it cost just a short time ago?
If they go through with letting users vote out moderators it will be an absolute shit show. Brigading alt-right discord channels will organize the ouster of pretty much every "librul" subreddit's mods and destabilize the entire platform. In a few months it will be a voat like hellscape. I don't think this idiot would mind that though as long as he gets his big payout from going public.
Well that's gonna be a major yikes from me dawg. I knew it was bad when Reddit had to be shamed by CNN before they removed /r/jailbait. I knew it got worse during the 2016 election. But my god this is just fucking insane.
Hahahaha of the list of all the people not to emulate in this day and age, Elon definitely tops it. Well done, Huffman. How's that last thunk from the final nail in the coffin sound?
Just more confirmation that running away from reddit was the right choice. We all owe the developers of the fediverse for have all these platforms and welcoming everyone.