Elon Musk's Twitter Layoffs Are 'Setting an Example' For Tech

Investor Keith Rabois says technology companies have been hiring for a hollow reason.

Investor and technology executive Keith Rabois has some harsh words for the hiring practices of technology firms.

He particularly names Alphabet's  (GOOGL) - Get Free Report Google and Meta's  (META) - Get Free Report Facebook, saying they employ many workers who don't play meaningful roles.

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Rabois, chief executive of Open Store and general partner of venture capital firm Founders Fund, says there are thousand of employees at Meta and Alphabet that were brought on to boost hiring for the sake of company vanity.

"All these people were extraneous, this has been true for a long time, the vanity metric of hiring employees was this false god in some ways," he said at a an Evercore  (EVR) - Get Free Report event in Miami, according to Business Insider. 

Rabois said that recent layoffs in the tech sector are overdue.

"There's nothing for these people to do -- they're really -- it's all fake work," he said. "Now that's being exposed, what do these people actually do, they go to meetings."

Rabois is a part of the PayPal Mafia, which includes PayPal  (PYPL) - Get Free Report co-founders Peter Thiel, Reid Hoffman, Elon Musk and PayPal employee and YouTube co-founder Jawed Karim.

Rabois' thoughts about over-hiring in the technology industry are similar to those of Andreessen Horowitz general partner Marc Andreessen.

"The good big companies are overstaffed by 2x," Andreessen tweeted. "The bad big companies are overstaffed by 4x or more."

Rabois said he thinks cutting head count is one of the prime methods of increasing cash flow.

"Rabois said that he expects the industry's focus to shift away from a growth-at-all-costs model to focus on profitability metrics such as the revenue generated per employee," wrote Business Insider. 

He also had supportive words for Tesla  (TSLA) - Get Free Report and Twitter owner Musk, who has laid off thousands of employees at Twitter since taking it over in October 2022.

"People are watching Elon and Twitter and he's clearly setting an example — maybe it's an extreme example," Rabois said.