October 24th, 2015
Image Source: REUTERS/Rebecca Cook
In a time when profits matters to keep the investors happy, investment in their own employees more often than not has taken a back seat. Twitter’s chief executive and co-founder Jack Dorsey had instant headline grab when he had announced giving away 1/3rd of his shares in Twitter (valued at 197 Million dollars) to be invested back in employees’ present and future, including promotions and skill development.
Counter Poaching In The Valley
Steve Ballmer (Microsoft Chief Executive) has brought a 4% stake in Twitter making him one of the largest stake holder’s of twitter more than Jack Dorsey himself. The “re-investment” comes in the backdrop of twitter axing 8 % of its employees. This move is expected to re-instill confidence in its employees and also to increase their loyalty to their company. Silicon valley is well known for big firms poaching on other big firms’ employees. What Jack Dorsey is doing is likely to keep the company’s best employees together at Twitter.
How Much To Re-Invest, How Much For Revenue?
Reducing costs, overheads for more profits to keep investors happy and to attract more investments have more often resulted in employee emoluments taking a back seat. To what extent employees ought to be invested on and to what extent revenue and profits are to be the sole drivers of investments? Tough questions which free market economics is yet to answer. No matter what the answers are Jack Dorsey of Twitter could well might set a new precedent