Video: Could Twitter layoffs be sign tech bubble is about to burst?

 

SAN FRANCISCO (KRON) — A big announcement by Twitter Tuesday, as the San Francisco-based company announced it’s laying off hundreds workers.

So, KRON wanted to know whether this is a sign the so-called tech bubble is about to burst. There’s been talk that the Bay Area may experiencing another tech bubble like in the late 90s, and when a high profile company like Twitter announces layoffs.

The conversation turns to speculation about whether or not the bubble is going to burst. On Tuesday afternoon a business professor at San Francisco State said that’s not going to happen, and that the troubles are limited to Twitter. On Tuesday, Twitter announced that it is laying off 336 people or about 8 percent of its’ workforce.

“It’s kind of smart and bold move,” Dr. John Sullivan said.

Dr. Sullivan is a professor of business management at San Francisco State University. He said that the cutbacks at Twitter are long overdue, and that the changes could help kick start the company’s sluggish performance.

“It tells shareholders, it tells employees, it tells potential hires that they are changing,” Sullivan said. “And in addition, you get rid of 8 percent of your lower performers, so it will make the company leaner, faster, and more innovative.”

And while the Bay Area’s economy does follow a boom and bust pattern, Sullivan believes that the adjustments at Twitter do not mean that the tech bubble, if there even is one, is about to burst.

“Facebook is doing fantastic lately,” Dr. Sullivan said. “WhatsApp, Snapchat are all doing great, so it’s just them. They don’t know how to make money from their users.”

And finally, Sullivan said that if Twitter wants to stay competitive and survive, they need to innovate.

“The speed and the innovation. They’ve got to put in new features for the wow factors, so the kids say, ‘I gotta have that!'” Sullivan said. “And they just haven’t done that in a long time.”

Sullivan also said that most of the people being laid off at Twitter will probably find jobs in the Bay Area.

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