The rise and fall of tokenmaxxing has been dramatic, not least because of how quickly it happened. From a darling of CEOs wanting to show how AI-forward they are to a balance sheet nightmare, the journey this particular strategy for measuring AI lasted mere months before its star started to fade.

In this episode of the ITPro Podcast, Jane and Bobby are joined by Frank Böhmer, CEO of Ninox, to talk about what prompted the trend in tokenmaxxing, why it fell apart, and what comes next.

Highlights

"[Gamification] leads to a pretty high stress factor for the employees, because they feel really pressed, even if it's not a direct performance metric, if it's just ... something that creates visibility, and so they feel really pressured to utilize LLMs to the highest possible amount."

"If you put this kind of as a success metric and monitor it, then it becomes useless, because people kind of optimize for that ... so even just looking at the output, so the number of tokens does not say a lot, and it's very easy to use models in a way that is not efficient. It can easily, for example, pollute the context window by just cramping in all the information you have."

"When you have to work with within the constraints of a budget or a token budget, then there are clearly ways to optimize the outcome I can create with models, for example, by providing the right information within the context of the model, by making sure that all the data that the company processes is readily available for models to work with by giving the right guidelines for teams to utilize that by giving them access to the right models in the right context."

Footnotes and sources

• Could rising token costs boost interest in on-premises hardware?
• Uber’s eye-watering AI bill shows enterprises are ‘still measuring AI success through consumption rather than outcomes’ – and it's warping our perception of ROI and productivity
• IT leaders are being stung by "unexpected" AI costs
• The AI pricing time bomb
• ‘What we’re seeing right now is just rapid escalation in AI token spend’: Accenture tells staff to stop using AI for unnecessary tasks amid surging costs
• Surging AI costs could exceed developer salaries by 2028 – analysts say context engineering could be the key to optimizing token consumption
• Companies are regretting investing in generative AI so quickly – here’s how to avoid buyer’s remorse
• Goodhart's law - Wikipedia

Organizations are continuing to waste money on cloud resources that they do not require, with 50% admitting that overprovisioning of cloud resources was a major factor.

Idle or underused resources came just behind and a lack of skills was blamed by 43% of respondents to a survey.

Other factors included “temporary” cloud resources that are never ended, such as a service trialed by a customer that is never switched off, along with varying geographical costs resulting in more spending than expected.

The report from HashiCorp and Forrester, released this week, indicated the issue of overspending has not changed from last year’s figures.

Overprovisioning occurs when a customer reserves resources in the cloud, such as CPU or storage, but doesn’t actually use them. 

While overprovisioning may simply appear like bad management or a loss of administrative control at first glance, the increasingly complex nature of cloud tooling can lead to customers buying services that are not necessarily needed.

While it might be possible to dynamically allocate resources in some instances - serverless architecture is a good example - this can result in performance or capacity issues, meaning reserving resources in advance is often unavoidable. 

One solution to the challenge of overprovisioning is careful monitoring of actual usage in order to optimize cloud spend and gain visibility over one’s estate.

The adoption of best practices across an entire organization, such as using automation and infrastructure-as-code, can also cut down on overprovisioning through the implementation of well-defined processes around resource usage while also improving scalability. 

HashiCorp’s report noted that the approach of adopting best practices also lends itself well to a multi-cloud environment. Almost all of the organizations surveyed that had done so said that multi-cloud was working well for them, or would be shortly. 

The potential difficulties in adopting those practices should not be underestimated, though, the report read. 

An issue that pervades the IT industry, 27% of respondents said skill shortages was one factor complicating the operationalization of multi-cloud in their organization. Siloed teams and a lack of training were also concerns.

Once best practices are in place, or well on the way, organizations are then well-placed to take advantage of savings by selecting services from a variety of vendors and avoid being locked-in to one particular cloud.

While avoidable cloud spend appears static compared to the previous year, the report concluded organizations that are further along the journey to the adoption of best cloud practices, including the creation of a platform team, reported a reduction in overprovisioned, idle, or underused resources as contributing factors.

Revenue in the global semiconductor industry is set to plummet by more than 11% over the next year as waning business demand for hardware impacts manufacturers. 

An analysis from Gartner this week projected an 11.2% decline in revenue to around $532 billion, marking a significant decrease from a market total of $599.6 billion in the year prior.

A key factor in the predicted revenue contraction is the consistent decrease in demand witnessed across the PC, tablet, and smartphone semiconductor markets, which Gartner warned is ‘stagnating’. 

Tightened budgets at businesses worldwide mean that semiconductor manufacturers will be faced with an increasingly competitive and strained marketplace. 

These combined markets will account for around 31% of all semiconductor revenue in 2023, totalling $167.6 billion. 

“As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment,” said Richard Gordon, practice VP at Gartner. 

Gordon added that a rampant oversupply of semiconductors will also have a significant impact on the market. 

This saturation of chips is “elevating inventories and reducing chip prices” across the board, which in turn will accelerate the decline of the market across 2023. 

Tough conditions for hardware demand

Demand for IT hardware has been consistently decreasing in recent months due to deteriorating economic conditions. 

Research from Gartner in January revealed that global PC shipments declined to record levels in the final quarter of 2022, dipping to 65.3 million and representing an overall decline of 28.5%. 

Budgetary constraints among global businesses, combined with a growing trend of firms delaying purchases and extending lifecycles were all highlighted as key contributing factors, Gartner said at the time. 

This trend has continued into early 2023, analysis shows. Earlier this month, IDC revealed that global PC shipments dipped by nearly one-third in the first quarter of 2023, highlighting this continued decline. 

The research from IDC showed that total shipments of PCs declined 29% in Q1 to 56.9 million units. IDC said that weak demand, excess inventory, and a “worsening macroeconomic climate” were responsible for the drop in shipments.

The economy has been in turbulence for many months, and a combination of global conditions and domestic policies will have extended these conditions well into 2023 and likely beyond.

Although it’s looking less likely the UK will suffer a technical recession this year, the economy is still set to contract. What this means for many businesses is rising costs and likely a hit to revenue. This will be difficult to manage for many of the largest organisations – but could be devastating for small and medium-sized businesses (SMBs).

Beyond the most obvious areas of cost savings – including reducing energy costs or cutting back on office running costs – are a number of areas in IT that could be identified as fertile ground for reducing expenditure. These might include reducing cloud costs or even cyber security costs, but there are other tactics small businesses might wish to employ to get costs under control and seek to limit damage in the coming months.

1. Transfer your data to NAS devices

Where is your company’s data stored? It’s all the rage to push data into the cloud and make it somebody else’s problem. However, this is rarely the real outcome. Although a well-run data centre is likely to be more robust than a tired Dell desktop computer hiding under a junior IT employee’s desk, it’s simply your data in someone else’s computer.

Of course, cloud services have their places, especially for bulk offline storage of data. But it might be more advantageous to run a pair of NAS boxes: one as primary storage, the second as secondary, placed as far apart as possible and preferably in a separate building. Use the built-in replication tools to create snapshots of your data, and send these over the network to the second unit. Finally, pay for cheap cloud storage and push your updated data to that encrypted cloud storage on a daily basis.

These boxes aren’t going to be too expensive, unless you buy high-end versions, but don’t fall into the hidden costs trap. Ensure you have enough drive slots and set up the disk arrays appropriately in a fault-tolerant arrangement. With thought and care, there’s no reason why you can’t look for at least six years of life out of each of these boxes.

2. Cut expensive software subscriptions

Subscriptions to platforms such as Microsoft 365 and Adobe Creative Cloud cost a lot of per user once you annualise the monthly costs. Do you really need all the capabilities of Excel? Or Photoshop? If so, who in your organisation has that need, and are cheaper third-party tools good enough for everyone else?

For example, LibreOffice has most of the functionality of a ten-year-old copy of Office, but at no cost. Affinity graphics tools, too, cost a few tens of pounds per seat, with no rolling monthly licensing overhead.

If you really do need to have Microsoft Office 365, for instance, are you on the right plan? It’s likely there are areas there that can be pared back, especially for less power-hungry users. Take a good look as big savings can be made here.

Finally, are software services slipping through on personal credit cards and then being charged as expenses? This is surprisingly common, even in large organisations where there should be better control. As always, follow the money to build a picture of what is being paid for, and who’s using it. Then you can decide if they need it, or whether this is a historical hangover.

3. Review all cloud subscriptions

This brings us to cloud subscription services as a whole. These are very easy to sign up for, and there can easily be ‘vampire’ subscriptions you’re still paying out for each month that no longer deliver value. Turn off auto-renew on every piece of software you can. Companies are good at sending out reminders that a subscription is coming to an end, but don’t get caught by the “we renewed your licence (a month early) just to make sure you kept receiving our wonderful service”.

Some tasks really do benefit a cloud service, of course. Certain back-office applications, for example, let several people have a login and can help when working in a shared data environment. Don't dismiss the cloud out of hand. Simply ensure it is doing what you need for the tasks required.

4. Audit company devices

Do you have an audited list of devices on your network? Are the computers lurking in the corner that hark from the Jurassic Era? Are they doing perfectly innocent tasks but in an inefficient way? For example, there might be an ancient Dell desktop hiding in some cupboard, with a screen but backed up by a small uninterrupted power supply (UPS). It might have a relatively minor function – like running a printing queue for a laser printer – but is this really necessary? The device could be chewing through electricity for little reason.

All infrastructure should be on DHCP-reserved addresses. It gives you the flexibility to manage the device but ensures that you actually know what the device is. Devices on the network that are on true floating IP addresses should be devices that come and go from the network, like user laptops.

5. Control printer costs

Large professional-grade printers last a long time. Monster devices like the HP 5550, which has five paper trays and prints double-sided A3 in colour, can be at least 15 years old and still going strong but might cost a fortune to fill with toner cartridges.

Have you considered a much cheaper office-grade inkjet that has either a rolling ink subscription or refillable ink tanks for all other work? Is it really necessary to print in colour, or will black and white actually do just fine? Managing print costs can save a fortune.

6. Control power costs

Old hardware might be tempting to keep running, especially in light of e-waste concerns and not adding to the problem. It’s entirely possible, though, that you could replace power-hungry older devices with something cheap that uses a fraction of the electrical power. What's wrong with a small Intel NUC Pro that consumes 5W when idle, for example? Or even something Arm-based? Run the return-of-investment sums and obey the end result.

Finally, are you turning off these devices at the end of the day, or just hoping they go into some sort of power-save mode? There’s much to be gained here by rigorous management of power-on time.

7. Rationalise servers

If you have a few old trusty servers, now’s the time to simplify them down into one modern unit running virtual machines (VMs). Ancient rack mount servers might look twinkly in a rack, but they chew through energy and often need air conditioning to keep cool. Can you push the boat out, and even run a server closet at a temperature that’s fine for the servers, but perhaps uncomfortable for users?

8. Turn off the heating

Speaking of heat, it’s common to not only run the heating beyond a working day but through the weekends too. Providing you ensure there is no likelihood of frost build-up, why not aggressively turn off the heating and HVAC at weekends? Just ensure people have the means to turn on the heating for their area if needed.

9. Use different currencies to pay for goods and services

If you’re paying for services, what currency are they based in? It’s common for US dollars to be the pricing behind many cloud services, and we’ve all experienced significant price increases in some platforms this year due to the change in exchange rates. Are there UK or EU-based service providers that can do the same job, but at a more friendly exchange rate?

Indian IT and consultancy multinatinoal Wipro has almost halved salaries for its graduate scheme employees, prompting widespread criticism and calls for explanation over the sudden change in its hiring practices.

Wipro runs two graduate hiring tracks known as ‘Elite’ and ‘Turbo’, which carry annual salaries of ₹350,000 and ₹650,000 (£3,500 and £6,500) respectively. Through an internal scheme known as the Wipro Velocity Upgrade Program, Elite candidates can partake in 4-6 months of training in order to be upgraded to ‘Turbo’ status and receive the higher pay package.

But in an email sent last week, candidates who had completed the programme were offered project engineer roles at the Elite rate of ₹350,000, and told they had days to decide whether to accept the offer. Those that accept will be onboarded in March, with no commitment made for higher-paid roles per the company’s previous offer.

It is believed that more than 4,000 candidates were affected by the decision and given until February 20 to notify the company of their decision. The significant cut in starting rate raised alarm and confusion in the hiring pool.

“Our talent is our most valuable asset. We are committed to creating an environment where all our current and future employees are able to build successful careers and realise their goals,” a spokesperson for Wipro told IT Pro.

“In light of the changing macro environment and, as a result, our business needs, we had to adjust our onboarding plans.

“As we work to honour all outstanding offers made, this current offer creates an immediate opportunity for candidates to start their careers, build their expertise and acquire new skills—both through the interesting and innovative work that we do, as well as our extensive learning and development programmes.

“At Wipro, we are committed to the growth and success of all our employees and look forward to welcoming this new group of recent graduates.”

The cut is especially significant considering the average salary of earners in India. According to The Economic Times, those who earn ₹300,000 (£3,000) or more per year place in the country's top 10% of earners.

The Times of India reported that the Indian IT industry union Nascent Information Technology Employees Senate (NITES) has filed a complaint with the labour ministry in response to Wipro’s decision.

NITES also issued a statement in solidarity with Elite candidates who have been made to wait months for roles in the lower-paid tier, some of which have now been seemingly offered to Turbo candidates as part of the reduced offer.

“The delay in onboarding has caused immense stress and financial strain for these freshers, many of whom have been waiting for months on end with no clear end in sight. This is unacceptable, and it is a clear indication of the unethical practices that are rampant within Wipro,” wrote Harpreet Singh Saluja, president of NITES.

“We urge all workers to stand together in solidarity with these freshers and demand that Wipro take immediate action to resolve this situation. We call upon the company to provide these workers with fair compensation for the time they have spent waiting, and to ensure that they are onboarded in a timely and respectful manner.”

Macroeconomic headwinds have been blamed for a number of cuts, layoffs, and changes in workplace conditions in the past few months. Amidst big tech layoffs that have seen tens of thousands fired, Intel slashed staff salaries and bonuses and benefits at Twitter were been decimated.

In October 2022, Meta cancelled promised internships in a cost-cutting move similar to Wipro's decision.

IT leaders have become increasingly worried by cost of living pressures which have raised salary demands of employees to levels that businesses cannot match.

C-suite executives identified salary demands driven by increasing prices as among the top three issues facing organisations amidst tech talent shortages, according to a new report.

These also included growing demands for a four-day work week, with 40% of respondents having flagged this as a structure they cannot currently provide.

Many respondents indicated that the unstable economic and hiring landscape is making staff recruitment and retention much more difficult, with 42% worried that staff will leave due to burnout. 46% of respondents stated that due to staff shortages, overworked staff are having to 'fight fires' and this is having a detrimental effect on productivity.

The results were published in enterprise software provider Rimini Street’s IT leader future outlook report 2023, which gathered data from a range of CIOs and CTOs throughout the industry.

Filling the talent gaps

46% stated that they are relying on external work partners to meet IT goals. Results also showed that IT leaders are aware of the need for people-oriented changes and more open hiring policies to plug these gaps throughout the year.

To grow teams and fill hiring gaps in 2023, 60% of respondents indicated that they would hire individuals with less experience or skills but an enthusiasm to learn.

Other strategies indicated in the report include a focus on hiring remote or overseas workers (50%) and cross-skilling or upskilling existing workers (39%).

Some firms are also entering into agreements with universities to drive candidates towards skills and careers in high demand, with 48% of those surveyed having indicated that this is an option they will pursue.

Universities can play a key role in boosting digital skills, as well as in fixing the gender bias in STEM roles to improve the overall range of talent available to businesses.

Changing strategies to adopt more flexible work arrangements is also an area that could improve onboarding for businesses. 38% of respondents stated that demands made by high-ranking staff to return to the office were a primary deterrent for potential recruits.

Beyond hiring challenges, executive teams are looking at a range of ways to ensure that current employees have the necessary skills without putting them at risk of burnout.

This is a crucial goal for IT leaders in a tech landscape still impacted by the so-called ‘great resignation’ and prolonged skill shortages of the past few years, and 47% plan on retraining internal staff in 2023.

A number of strategies have been implemented by firms to combat each challenge faced. 52% of respondents stated that they plan to encourage staff to learn skills via virtual training courses, while 46% identified the importance of checking line managers receive training on new technologies and on how to help employees adapt to these.

Reskilling and upskilling workers can be a crucial method for improving employee satisfaction and retention, as it represents a meaningful investment in one’s workforce.

Principal engineers in California can expect to earn more than $1 million per year, a new study on pay rates within the tech sector has revealed.

According to the data, principal software engineers at Facebook’s HQ in Menlo Park, California can expect to earn over $1 million once salary, stock, and bonuses are taken into account, while other positions in San Francisco at Stripe and Airbnb are worth $900,000 and $800,000 respectively.

The majority of all high-paying roles in the results were based in California, with a few notable exceptions. Staff engineers at Coinbase earned $673,000 on a remote-first contract, while high-salary engineer roles also came from a range of cities including Bozeman and Beijing.

Overall, California topped the list compiled by salary aggregation website Levels.fyi, with median pay for tech workers in the San Francisco Bay Area at $234,000.

In comparison, the median pay for tech workers in London is just $116,000 - a figure well below the top ten rates in America, but second overall in Europe after Zurich, where median pay has reached $178,000.

Further east, median pay was even lower, with Israel topping the list at $159,000, and the median for Bengaluru in India at just $37,000.

Jobs requiring higher levels of experience and education paid more. The highest compensation listed for staff engineers, who typically have more than ten years of experience, was $688,000 (at Stripe) in comparison with $443,000 (at Databricks) for engineers who only require a few years’ experience.

However, even graduate jobs in the industry were shown to carry potential for high compensation. The results showed that entry-level engineers received $274,000 at Two Sigma, a hedge fund in New York City that uses artificial intelligence (AI), machine learning (ML), and data analytics to inform its investment decisions. However, all other firms in Levels.fyi’s top results for this job title are based in California.

The report also revealed the changing landscape of high-paying jobs in the tech industry. In Levels.fyi’s 2021 results, the highest-paying jobs in engineering were dominated by companies such as Roblox, Facebook, Apple, and Microsoft.

Of these firms, only Facebook and Apple have remained in the top results for 2022, with Stripe, Airbnb, Netflix, Twitter and Snap Inc. now representing the top pay offers in the sector.

Outside of the titles the company has formerly ranked, this year’s results also took into account emerging titles that carry high levels of compensation. These included positions such as software engineering manager (up to $910,000), product designer (up to $400,000) and hardware engineer (up to $376,000).

Pay and job security within the tech sector have become increasingly uncertain as countries face recession, and issues such as the energy crisis have led to reassessment of spending. In November 2022, Meta cut 11,000 employees citing inaccurate investment predictions, and Microsoft has reportedly slowed its hiring.

Cuts have not been contained to workers with the least experience. Following its acquisition by Elon Musk, Twitter fired 3,700 workers from throughout the company including executives and entire teams such as engineers working on new features for the social media platform.

Despite these trends, Levels.fyi stated that “compensation has still generally increased relative to last year at the topmost companies and levels”. The data shows that depending on region, workers can expect high levels of compensation, and that opportunities continue to grow for those seeking roles that are growing in demand.

There are three ways to address planned tech projects when the money gets tight. Businesses can delete them completely, put them on hold, or try to achieve them for less than the planned outlay.

There are many reasons IT projects fail. When a project has been identified as necessary, though, deleting it completely due to external economic factors might only rarely be the right call, which leaves the other two options. As ever, the devil is in the detail, so how do organisations approach budgeting for new or existing digital transformation projects in a financial squeeze?

The role of value engineering

Many firms have actually accelerated digital transformation projects rather than having scaled them back, Lee Foster, CTO of technology consultancy Opencast, tells IT Pro. “Putting off those critical strategic tech projects might help in the short term but, longer term, it can show up as outdated customer experiences, inefficient processes and disaffected employees – ultimately impacting operating effectiveness and your bottom line.”

Nevertheless, businesses must also think hard about how to make the money they do have stretch as far as possible in the context of the cost of living crisis savaging the tech industry. This is where value engineering can play a part. This strategy is all about looking at every element of a costed project and finding if, and how, it can be achieved at a lower cost with no loss of functionality.

This is tricky – and requires expertise. Poor decisions can require additional spending later on to fix errors. The right personnel need to be involved in the exercise, and it will take time to work out what can be done differently, postponed or left out completely – and what simply must be done.

Starting to value engineer a project with a target cost reduction isn’t the ideal way to go, either. That can lead to desperate cost-cutting to meet the mark and could jeopardise the project. It’s better to take your time, and have an open mind.

Prioritising the to-do list

It’s entirely likely a business has more than one tech project on its wish list. These always have to be prioritised, even when cash flow is good. When money is tight, prioritising becomes even more important.

Related link: Why businesses should invest their way out of a downturn

Last year, Gartner devised a set of actions organisations could take to give them an edge in the light of what was then seen as the possibility of a global digital recession. These measures still hold water. Importantly, Gartner suggests taking a strategic view that allows an organisation to assess projects across a range of factors including the cost and capital structure, products, pricing, employee value proposition (because staff are increasingly hard to recruit and retain) and risk profile.

The nine areas that merit attention are: accelerating the move to the cloud; focusing on making workflows faster, simpler and more agile; rethinking support for flexible working; reimagining the customer vision (that is to say, looking from the outside in – what do your customers expect and how can you meet these expectations, because if you don’t they may jump to another provider); and taking a look at how you use digital metrics so that they truly align with business outcomes.

What to do when a project is shelved

If you cannot value engineer a project to a point it’s affordable without compromising functionality – or it isn’t found to be a priority after the to-do list has been triaged – it might need to be paused. It’s important to be brave enough to put any project on hold, and to understand and articulate clearly the consequences.

Foster tells IT Pro that, in this situation, a business should “review the outcomes the project was intended to deliver”. Businesses should also ask: what additional technical and business risks will they have to carry as a result, and what can be done to mitigate them until the project is delivered?

It’s also really important to be aware that a shelved project is not a forgotten or deleted project. Foster advises that a business should keep the project visible on roadmaps and business plans discussed by decision-makers, while also continuing to report on the outcomes and key metrics the project was intended to address. This is so the consequences of not doing the project are clear, meaning it can be pushed up the priority list if necessary.

Stay positive and hunt for success

What’s most important in budgeting for new projects in a financial squeeze is not to think of any approach as ‘cutting’ or ‘deleting’. Instead, IT teams should take a more positive view centred on making the most of your assets, supporting the business through tough times, and maximising resources.

Finally, don’t lose sight of the fact that resources come in many forms – business finance today, business performance tomorrow, customer expectation and satisfaction, and the work experience and satisfaction of your people. All of these interplay to build up the entirety of a business’s resources.

Thinking in these terms may help businesses focus on the tech projects that really matter in an interconnected world, in which competitors and customers are also being squeezed. When everyone is in difficult times, a strategic approach and an eye on the positives can go a long way towards helping businesses take decisive action around tech projects.

Twitter is now under investigation by San Francisco’s Department of Building Inspections after it was revealed that offices in the company’s headquarters have been converted into bedrooms.

Employees who work out of the Twitter San Francisco office reportedly found on Monday that conference rooms throughout the office had been converted into rudimentary bedrooms, complete with double beds, wardrobes, and side tables.

The San Francisco Chronicle reported that Twitter does not have permission to use the headquarters for residential use, which the addition of bedrooms could constitute. The investigation is ongoing, and employees have already shared photos of the sleeping arrangements.

In response to news of the investigation, Twitter CEO Elon Musk tweeted that he was “providing beds for tired employees”, and linked a news story of a child who died after allegedly coming into contact with fentanyl in a playground, criticising the priorities of the San Francisco local government.

Later, Musk replied with ‘crying laughing’ emojis to a tweet joking that Twitter has accomplished in building new housing where city officials have not.

"Beds in offices are not unusual, with law firms and financial institutions known to provide sleeping facilities for their staff," Kevin Poulter, employment partner at Freeths told IT Pro.

"What's important is the purpose of the beds and whether employees are expected to stay in the workplace to be 'on call' or if they are provided for a nap between meetings, or for those who might be jet-lagged after a long trip. Workers in the UK and across Europe are protected by the Working Time Directive, which places limits not only on the amount of time an employee can work each week, but also strict rules around breaks during the working day and between weekly periods of work.

"This is aside from any health and safety and real estate regulations which might apply. Making beds available to employees could also lead to unwanted sexual conduct, which might not otherwise be facilitated."

Some employees have registered their surprise with the change, even as they had become used to the longer than usual working hours and weekly code reviews that has become part and parcel of Musk's strategy for the company.

“It’s not a good look,” a source within the company told Forbes.

“It’s yet another unspoken sign of disrespect. There is no discussion. Just like, beds showed up.”

The introduction of basic sleeping quarters to the Twitter office appears to be linked to Musk’s former demand that Twitter employees must adjust to an “extremely hardcore” new office culture, with massive cuts to staff benefits like remote work, and accepting long hours in the office. Employees were given a deadline by which they had to agree to the changes, or leave their role.

Hundreds of employees refused the demands, and left the company as a result, leaving the future of the platform uncertain. This was one of a number of controversial changes to Twitter, both internal and on the platform itself, since he acquired it at the end of October. One of the first moves he made in the role of CEO was to fire many of the company’s remaining executives, and he then cut half of the company’s employees.

Following the layoffs, the company has been sued by a number of employees who allege that they were not given adequate notice of the decision.

Akiva Cohen, a lawyer representing a number of former employees, tweeted the full text of the demand letter he sent to Musk, which stated that the “one month of salary, no bonus, no accelerated vest, and no contribution to healthcare” offered to fired employees falls “far, far short” of what they were promised.

Additionally, Musk’s introduction of paid verification, intended to improve ‘free speech’ amongst users, instead gave rise to chaotic impersonations of famous individuals and companies alike.

Firms such as aerospace and arms manufacturer Lockheed Martin lost billions in market cap as a result of the fake accounts, and Twitter is now planning to introduce colour-coded verification badges for businesses, governments, and individual users.

To say cyber security should be a top priority for any modern business feels as though it should be entirely uncontroversial in today’s climate. Between high-profile breaches, the risks opened up by our new ways of working and the well-established risk to reputation, finances and the general operation of your company, surely every organisation will be prioritising security as part of their IT investment?

The reality, however, does not always match up to this ideal. Security professionals still often have to work hard to improve security through tools, training and other techniques – and are met as often as not with indifference or hostility. Even where the board is concerned, while they might understand the need for bolstering security, securing the money, resources and support to make that happen is not always easy.

Having the board on-side when it comes to cyber security is key. They are the people who set strategy for the whole organisation; they can enforce security policy in a way that team leaders cannot, as well as ensuring the business operates a uniform security system that meets its needs.

On top of this, the business as a whole looks to them for leadership. If the people at the top are understood to be fully embracing security and the measures it takes to keep the company safe, it’s likely to help diffuse opposition throughout the ranks.

Speaking the right language

Of course, you can’t rely on the board having an in-depth understanding of IT and security issues. Some may have a grounding in the technical issues at hand. But you need to speak to them in a language that everyone can grasp, and one that communicates the importance of investing in your cyber security strategy.

One key is striking a balance between what the board needs to know and what it doesn’t. It’s worth making sure they can understand key concepts like zero trust and two-factor authentication, as these tie directly into how security operates in the business on a practical level. You can, however, stop before getting into the nuts and bolts of Trusted Platform Module (TPM) technology or sandboxing – in other words, concepts that are likely to confuse them rather than get them on board.

You also need to dispel some of the enduring myths surrounding cyber security – and particularly the criminals that perpetrate it. The stereotype of the faceless, hoodie-wearing villain can muddy the issue. This conception of the lone-wolf hacker can obscure the fact that cyber crime is a big, well-organised business, and that, in this environment, any organisation can become a target.

Your goal is to give the board a clear understanding of the level of risk involved, the potential cost of failing to address these risks, and a clear roadmap of how you intend to build your security systems to prevent these breaches from happening. The case is a strong one – it’s your job to communicate it. With the board’s backing, it will be much easier to access the technology you need and to roll it out successfully across your company.

To learn more about making your case for cyber security investment, and what to do once you have, read our co-branded IT Pro/Intercity report, ‘Getting board-level buy-in for security strategy’

Twitter is facing threats to its continued survival, in the immediate aftermath of a fresh wave of employee resignations that came as the result of new "hardcore" demands placed on employees by Elon Musk, Twitter’s newfound owner and CEO.

Hundreds of employees, at the least, are understood to have called Musk’s bluff and refused to commit to the new conditions, resigning from the company in a united rejection of Musk's Twitter 2.0 vision, calling the existence of the platform into question.

Employees had been given a deadline of 5pm on Thursday 17 November to agree to demands alluded to in a company-wide communication. As reported by The Washington Post, Musk had laid out two choices: buy into ‘Twitter 2.0’, or receive three months of severance pay and begin looking for a new job.

The new conditions involved changing the company culture "to be extremely hardcore" and shifting to longer work hours at a higher intensity, Musk said.

A currently unknown number of the approximately 3,700 employees left at Twitter stayed on to an uncertain future.

In an email shared by the BBC, Twitter told employees that it is “temporarily closing our office buildings and all badge access will be suspended”. Offices are set to reopen on Monday, 21 November.

Zoë Schiffer, managing editor at Platformer, tweeted that insiders suggested the move to shut offices was prompted by fear of internal sabotage by exiting employees, which if true speaks to a rapid shift in company culture to one of fear and suspicion.

It’s not yet clear what company employees will return to then, but there is no guarantee that it will resemble the one they left on Thursday. Musk cannot now unring the bell of his heightened demands, which paint working at Twitter as a demanding and unstable environment unlikely to attract new tech talent to the same degree.

If Twitter survives the upheaval - and this isn’t a certainty - the company may no longer be able to promise an uninterrupted, stable, or consistently-moderated service. Alex Heath from The Verge claimed that employees who had worked in Twitter’s “command centre”, described as essential to Twitter’s everyday operations, have resigned, and if true, this illustrates the ideology of Musk's changes coming to a head with the reality of running a platform like Twitter.

If the former can't sustain the latter, the site won't so much change to reflect Musk's desires as combust under his watch, as critical systems no longer sustained by employees fail.

Reuters cited an inside source who said that the employee version of the Twitter app was experiencing a noticeable slowdown on Thursday evening, and that the public version would soon experience significant difficulties.

Downdetector, a website run by internet performance monitoring firm Ookla, tracked a large increase in Twitter reports coinciding with the end of the working day on 17 November. Incidents more than quadrupled, from fewer than 50 per hour throughout the day to a peak of almost 600 over the course of one hour in the late evening.

What rises up in Twitter's place, or remains amidst the ashes, remains to be seen. But under the new management, and the uncertainty that brings, companies, governments, and may wonder if, after all the changes, Twitter is still the same platform they signed up for.

Even if moderation on the platform isn't radically changed, and Musk has continued to stress that it will be, it's difficult to shake the feeling that the site is now populated by users anticipating the collapse of the servers or a possible move behind a paywall any minute.

“For the employees who are left behind, the workplace and working culture at Twitter will have already changed forever,” said Kevin Poulter, employment lawyer at Freeths to IT Pro.

“Fewer employees, greater demands and an increasingly regulatory framework will invite fear, failure and inevitable frustration. With the world personally and socially invested in the success of Twitter, this is difficult to watch.”

Musk batted away concerns in a tweet stating that “The best people are staying, so I’m not super worried”. But, beneath the apparent indifference, actions taken by Twitter in the hours before the deadline speaks to an existential crisis occurring at the top levels of the firm.

Can Twitter sustain a ‘hardcore’ work culture?

Since Musk's 27 October takeover of Twitter, the controversial CEO has already made a number of questionable moves that have raised concerns about his ability to lead the company.

Musk's most-criticised steps include suggesting the company could go bankrupt, firing exactly half of all employees, and introducing paid verification which led to widespread imposters plaguing the platform. These caused reputational damage to the likes of pharmaceutical giant Eli Lilly which had billions wiped from its stock market value.

Such an uncertain environment is not likely to be met well by employees, and the changes brought about by ‘Twitter 2.0’ could even prompt legal action in some territories like the UK.

“Across Europe, employees are protected by the European Working Time Directive, which was adopted by European states, including the UK, in 1998 and entrenched in national law,” said Poulter.

“These regulations prevent employers from compelling employees to work long and excessive hours (with a standard maximum working week of 48 hours and a full day off each week), especially in high-intensity environments. Employees will be protected against suffering any detriment if they assert their legal rights to breaks and employers can face criminal prosecution by the Health and Safety Executive, with sanctions including fines and prison time.

“Aside from working time, the invitation to resign which employees appear to have been offered could result in a number of constructive unfair dismissal claims in the UK as employees feel forced to leave for fear of the agreed terms of their employment being breached.

“Indeed, being locked out of the workplace and prevented from working could be sufficient reason to believe your employment has been unilaterally terminated. Employees with over two years’ employment have unfair dismissal rights and protections against dismissal where there are no reasonable grounds for such action. Before resigning, employees are encouraged to seek professional legal advice and to consider the options available to them.”

Flexible working is another area in which changes are likely to prompt employee complaints. Two years ago, Twitter employees were told that they could now work from home indefinitely.

Last week, in leaked audio obtained by ABC News, Musk was heard telling employees “if you can show up at an office and you do not show up at the office: resignation accepted. End of story".

With recession looming in the UK, businesses face the prospect of cutting back in several areas to ensure survival. Nothing is off the table and, unfortunately, this can also mean reducing budgets for cyber security.

Amid rising costs and efforts to keep energy bills under control, businesses might need to be creative and seek savings from areas such as cloud computing expenditure and even cyber security. The latter, however, might seem a dangerous prospect, given the rising spectre of cyber threats like ransomware.

Two-thirds (67%) of small and medium-sized businesses (SMBs) spend less than $50,000 annually on cyber security, with 57% fearing inflation will lead to a change in plans, resulting in budget cuts, according to OpenText Security.

This anxiety comes despite a recent surge in cyber attacks, highlighting the need for properly funded cyber security strategy. In fact, it poses the very pertinent question of how can organisations possibly maintain the same level of protection while aiming to slash budgets.

The guiding principles for reducing costs

One does not take a knife to cyber security budgets lightly; there needs to be a handful of guiding principles to ensure basic standards are maintained while the risks are mitigated.

CTO at Global Rubrik MSP Assured Data Protection, Stew Parkin, tells IT Pro one of the things he has witnessed is customers starting to consider reducing the overlap of features and functionalities included within the products they’re buying.

“Companies are often rushed to market to buy as much as they can to fit a specific gap,” he says. “However, these gaps can now be filled by a single or a reduced list of vendors or products. Cost efficiencies are often to be found by the consolidation of licences, but also by the consolidation of skills within the internal teams and security operations centres (SOCs).”

However, Leigh McMullen, distinguished VP Analyst at research firm Gartner, says that he doesn’t see costs going down and the foremost mission for the CISO and cyber security team is to defend the value proposition of the enterprise. “Heretofore that’s been a game whose only possible scores are zero – you don’t suffer an incident – or negative one – you do,” McMullen says. “Instead, leading thinkers are focusing much more on resilience. While no CISO can offer “perfect protection” they can offer increasing levels of resilience and recoverability of the value proposition.”

First steps to reducing cyber security budgets

One of the first priorities for a business when cutting cyber security costs is to try to understand the scope of systems and assets the business is trying to protect. Then, comes assessing the level of risk to those systems, says Martin Walsham, director of Cyber Security at cyber security consultancy AMR CyberSecurity.

“When a business has an understanding of these, it’s then in a good position to look at priorities in terms of budget and effort to manage the highest levels of risk within their organisation,” he says.

He adds there are some key considerations as to when a business should also assess where and how it’s spending the budget, to ensure it’s being spent wisely. There are a number of questions, amounting to a checklist of sorts, businesses should be asking of themselves, largely spanning the very basics.

Spending large amounts of money on state-of-the-art tools, like AI-powered cyber security software, for instance, makes no sense if an organisation isn’t patching and controlling its configuration, says Walsham. Businesses should also ask themselves if it’s possible to build security into contracts for outsourced services. “This avoids an additional layer of internal costs and ensures third-party contracts are appropriately managed,” he says.

Another issue to consider is if the services and tools the organisation uses represents value for money. Walsham says this may seem simple, but it’s remarkable how many organisations fail to evaluate properly.

Benchmarking against well-performing peers is also important, meanwhile, according to Brian Martin, head of product, strategy, and innovation at cyber security consultancy Integrity360. “We know that benchmarking is crucial to successful security budget allocation. So, once done correctly and analysed, CISOs can then revisit and begin to decide on where they can afford to cut spending, armed with the full picture,” he says.

Which cyber security costs can be saved?

Cutting cyber security costs can be an opportunity to simplify things. Over time, an organisation’s security framework can morph into a complex web of disparate products, according to Mike Fry, security practice director for Logicalis UK&I. Each of these products will have its own costs, suppliers and IT management overhead.

“By taking a strategic approach and working with key vendors with wide capabilities, this can be rationalised down to improve efficiency, reduce IT burden and cut costs,” he says. “In some cases, businesses can reduce their costs by up to 50%.”

Brian Martin adds that, unfortunately, there's no definite figure that can be given for the savings that can be made, as it simply depends on the starting point for any given organisation, their strategy, and their risk appetite.

“However, it’s well understood, for example, that buying a SOC service, or a managed detection and response (MDR) service can cost less than half the amount as compared to building and staffing it in-house,” he counters. ”Vendor negotiations, bundling, and longer-term contracts can often deliver annual savings of more than 10%.”

Don’t compromise on overall protection

Businesses need to get the basics right and upgrade their 360-degree resilience. Organisations are recommended to avoid the ‘lock the door and leave the window open’ approach, which compromises on basic security infrastructure and moulds organisational needs together, says Nehal Thakore, country head UKI at Bosch CyberCompare.

“To create a holistic cyber security strategy, businesses can implement the National Institute of Standards and Technology (NIST) framework,” Thakore says. Based on five key pillars – identify, protect, detect, respond, and recover – the NIST framework helps businesses of all sizes better understand, manage and reduce cyber security risk while maintaining the protection of networks and data, he adds.

“Businesses can better decide the prime areas to invest time and money for cyber security protection,” Thakore continues. “Regular cyber security awareness measures and training for employees is a significant way to ensure overall protection.”

Martin adds, to ensure overall protection, a healthy balance of investment in human involvement and automation is crucial. “This needs to be underpinned with a very clear security strategy and alignment to a security framework which will provide guidance as to what are the essential controls are that cannot be compromised upon."

Twitter has sustained an exodus of senior company officials, amidst growing concerns about the direction of the company under the management of CEO Elon Musk, alongside questions around the company's financial viability.

Staff who have reportedly resigned include Twitter’s chief information security officer (CISO) Lea Kissner, chief privacy officer, Damien Kieran, chief compliance officer, Marianne Fogarty, and head of trust and safety, Yoel Roth, prompting concerns about an absence of crucial safety leadership at the company.

In recent weeks, Roth has aimed to be a voice of calm, tweeting regular updates on the work Twitter has been doing to reduce hate speech and defending the widely-criticised introduction of paid verification, which comes as a feature of the $8 per month Twitter Blue subscription tier. His unexpected resignation, alongside many of his colleagues, speaks to the current volatility within Twitter.

Within the same 24 hours, Musk is understood to have been frank about the unstable financial situation of the company on an all-hands call with Twitter employees. Zoë Schiffer, managing editor at Platformer, tweeted that “Musk just told Twitter employees he’s not sure how much run rate the company has and ‘bankruptcy isn’t out of the question’”.

Just a week prior, Musk fired 50% of Twitter’s employees, later tweeting an explanation that “unfortunately there is no choice when the company is losing over $4M/day [sic]”. At the same time, Reuters reported Musk had ordered employees to find $1 billion in Twitter infrastructure savings immediately, indicative of the company's urgent financial status.

Companies could also pull their advertising from the platform, as paid verification makes reputational damage by imposter accounts easier than ever. A number of high-profile company Twitter accounts have been convincingly-imitated since the change was made, including Apple TV, Nintendo and pharmaceutical firm Eli Lilly and Company. Although some seek only to confuse users and satirise company comms, others are using their convincing fakery to promote cryptocurrencies, or push phishing links.

General Mills, Pfizer, and General Motors are understood to have paused advertising already, cutting into a key source of revenue for Twitter — advertising accounted for 91% of all the company's revenue in Q2 2022.

With key security officials now having left the company, the Federal Trade Commission (FTC) is reported to be watching the resignations closely, and monitoring the continued adherence of the company to regulatory orders. In May, the FTC issued an order to Twitter, requiring the firm to pay a $150 million fine for using its users’ phone numbers and email addresses to serve targeted ads.

The order also required Twitter to implement an improved information security programme, and required the company to allow independent third-parties to carry out privacy and security assessments.

"We are tracking recent developments at Twitter with deep concern," Douglas Farrar, director of public affairs at the FTC, told Reuters.

"No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”

Another high profile figure reported to have resigned was Robin Wheeler, VP Twitter client solutions, who is directly charged with ad sales and the company’s relationship with advertising customers. However, these reports were apparently premature, with Wheeler having tweeted “I’m still here,” indicating her continued presence at the company on the evening of 10 November.

It has been widely reported that Musk also sent employees an email on the morning of resignations, stating that employees would no longer be given the choice to work from home. In audio obtained by ABC News, Musk is heard saying: “If you can show up at an office and you do not show up at the office: resignation accepted. End of story."

Implementing this new policy would face significant challenges if applied in the UK, according to Kevin Poulter, employment partner at law firm Freeths.

“Employees may have previously varied their working practices, in writing or by custom and practice," Poulter told IT Pro. To change that unilaterally, with Musk as the only arbiter, will not sit well. It also undermines the right all employees with 26 weeks’ continuous employment have to request flexible working and for it to be granted unless there are limited reasons to refuse.

“It is doubtful that this approach will do anything to improve the prospects of a progressive and collegiate culture at Twitter, or stem the voluntary flow of resignations already announced by employees on the very platform from which they are departing.

“This was underlined by a warning, if not a threat, to employees that ‘bankruptcy is not out of the question’. It is important for employers to be open and transparent with staff, but it is only helpful when there is an already established relationship of community and trust. Leading on a threat is not likely to build confidence in the already significantly reduced workforce and may, in and of itself, be the reason Twitter falls.”

The news comes just a week after a wave of redundancies at Twitter, attributed to cost-saving measures. Employees had been notified the evening prior to the announcement they would find out the status of their employment by the next morning via email. But some such as company machine learning (ML) and algorithmic bias expert Rumman Chowdhury, became aware of their newfound redundancy beforehand as they lost access to their company email, or were remotely logged out of their Twitter Slack accounts or had business laptops remotely wiped.

Will Oremus from the Washington Post tweeted a copy of the notice, which was notably signed “Twitter”. In the hours following the redundancies, Musk faced criticism for failing to attach his name at the bottom, as has been the case with other recent cases such as Meta’s mass-firing of 11,000 employees.

Musk acquired Twitter on October 27, and quickly fired CEO Parag Agrawal and chief financial officer Ned Segal. In the weeks since this event, the social media platform has undergone a series of changes, such as the aforementioned introduction of paid verification, as well as the brief use of a secondary ‘official’ tag to separate known public figures from those who have paid for a blue tick.

Meta has announced plans to make 11,000 staff redundant, in a company-wide move to cut back spending following record drops in revenue.

The tech giant has announced the cutback of around 13% of its staff following a financial period that has not seen the financial growth it had anticipated. In the current environment, the company states it cannot keep up its current level of investment.

Employees were notified in a communication by Mark Zuckerberg, co-founder and CEO at Meta. At the same time as the cuts were announced, it was also stated that a hiring freeze would carry forward into Q1 2023, with some exceptions, and would be reevaluated, then, in line with business performance and macroeconomic headwinds.

“In this new environment, we need to become more capital efficient,” said Zuckerberg, in his message to employees.

“We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse. We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint.

“We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”

Employees made redundant in the decision will receive 16 weeks of base pay, with another two weeks added for each year of their service with no maximum amount. Meta also announced that newly-fired employees will continue to receive healthcare benefits for six months, as well as careers and visa advice.

“For those working in the social media and digital tech sector, this announcement from Meta could not have come at a worse time,” said Kevin Poulter, Employment Partner at Freeths.

“Although it is anticipated that the cuts in the UK will be a small portion of those in the US, the impact on the sector could be huge. Confidence in the tech job market, the opportunity to move freely and easily between established and start-up companies and the once-celebrated people-centric culture have been diminished if not wholly undermined within a week. How this will affect investment in these organisations, large and small, is yet to be seen, but if the leading lights of Twitter and Meta are now approaching the future cautiously, others are likely to follow.”

Meta has been moving towards such a cut for several months. In October, the company cancelled planned internships, stating that it was shifting its hiring strategy in line with business needs going into 2023. The move prompted criticism from industry experts, who pointed to the ongoing skills shortage to argue that short-term cost-cutting measures like cancelling internships and graduate schemes will only exacerbate the problem in the long term.

Its Q3 2022 earnings call deepened concerns for investors, as the company announced a 52% year-on-year drop in net income, alongside a 19% surge in spending across the same period. Following the call, the value of the company fell by over $65 billion, charting a dramatic drop in investor confidence.

Meta’s financial situation has been openly questioned throughout the year, as the company has doubled down on investment in metaverse technology, which some call a waste of time. Reality Labs, the wing of Meta charged with research and development in metaverse tech, virtual reality (VR), and augmented reality (AR), cost the company $3.7 billion in Q3 alone, and Meta admits that its operating losses are expected to grow in 2023.

In addition to increased spending, Apple's privacy improvements have cost Meta around $10 billion in 2022 alone, while the company has also been hit especially hard by the strength of the dollar throughout 2022. This has impacted international sales and advertising revenue, which is doubly affected by industry-wide cutbacks in spending driven by high inflation.

Meta’s decision is the latest in a series of such cutbacks among some of the world’s largest tech firms. At the start of November, Twitter fired around 3,700 employees immediately following its acquisition by Elon Musk, and was reported by Reuters to be looking for up to $1 billion in infrastructure cuts. In September, cloud communications platform Twilio announced 11% of its workforce would be cut, citing concerns over the sustainability of its growth similar to Meta, while Google has ordered staff to improve efficiency, and reportedly abandoned a Pixelbook range to deal with macroeconomic pressure.

Twitter has commenced a mass wave of layoffs that could see as many as 50% of the workforce fired, in the first major restructuring of the company since it was acquired by Elon Musk.

Twitter employees were notified on Thursday that by 09:00 PST on Friday 4 November, they would be made aware of the status of their employment via email.

Those remaining at the company would receive the notice sent to their Twitter email, while those fired would receive the notice to their personal email. Reportedly, the subject lines in both sets of emails are: 'Your Role at Twitter'.

At last count, Twitter had around 7,500 employees worldwide. It is expected that in all, the cut could see around 3,700 employees made redundant or just over 50% of the entire workforce.

“Team, in an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” the email read, according to a Washington Post reporter who tweeted a copy.

“We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company's success moving forward.

“Given the nature of our distributed workforce and our desire to inform impacted individuals as quickly as possible, communications for this process will take place via email. By 9AM PST on Friday Nov. 4th, everyone will receive an individual email with the subject line: Your Role at Twitter.”

Twitter offices have been temporarily closed. Despite choosing to notify employees of their redundancy by email, a number of employees have tweeted that before they could even be formally notified, they lost access to their company account, or had access to the company Slack revoked.

Following the notice, Twitter employees had reportedly taken to the company Slack channels to post a string of blue hearts, representative of the company’s trademark blue colour scheme. However, some employees were being removed from Slack even as this was taking place.

Rumman Chowdhury, a director at Twitter’s machine learning ethics, transparency and accountability (META) team tasked with improving Twitter’s machine learning (ML) and reducing algorithmic bias, tweeted that her Google password had been changed without her knowledge early on Thursday evening.

In a similar situation, Simon Balmain, the now former senior community manager at Twitter, tweeted that he “got remotely logged out of [his] work laptop and removed from Slack”.

Employees are also understood to be struggling with control of their Twitter accounts following their firing. Alex Heath from The Verge noted that Twitter requires employees to link their work emails to their accounts for two-factor authentication (2FA), but with impending loss of access to their emails are scrambling to disconnect the two.

Entire teams are reported to have been fired at once, with one employee alleging that all members of a team currently working on a paywall bypass feature, which Musk has promised as part of his pitch for paid Twitter verification, have been fired.

Bloomberg reported that a class action lawsuit has already been filed against Twitter for its handling of the layoff, alleging that the company has breached a requirement for mass layoffs of this kind to be conducted with 60 days' notice.

Criticism of Musk’s methodology

Mass layoffs of this kind have drawn media scrutiny and social media attention in the past. In 2021 Vishal Garg, CEO at Better.com, went viral for a video in which he fired 900 employees over a Zoom call.

Debates around the convenience and cruelty of such a method were had in the fallout, with some concluding that email and video calls are arguably an effective way to notify large groups of people of any change.

However, a number of journalists and former employees are already criticising the methodology Twitter is using to notify its employees of their job status. Particular anger is being aimed at Musk for failing to attach his name to the company-wide email notifying employees of the decision, which is simply signed “Twitter”.

After acquiring the company for $44 billion at the end of October, Musk dissolved the board of directors and has subsequently assumed the role of sole director and CEO of the company.

In the week since, rumours have alleged Musk would downsize Twitter both for economic and ideological reasons, as the company’s strategic moves towards for-profit verification and to promote ‘free speech’.

Reuters reported that Musk has ordered Twitter teams to free up $1 billion in infrastructure costs, with a reported deadline of 7 November. This is the same deadline that was alleged for the introduction of paid verification, and cuts could be made to Twitter’s cloud costs.

The move comes amidst layoffs and hiring freezes by a number of tech giants. In October, Meta cancelled internships that it had already agreed to, in the name of cost-cutting, while cloud communications platform Twilio fired 11% of its workforce in September.

Microsoft, meanwhile, has ordered staff to slow hiring and be cautious around recruitment, as Google has urged its employees to improve productivity with ‘simplicity sprints’.

It’s been described as "paramount" that CIOs continue to have access to funding to help organisations carry out digital transformation, according to a leading Gartner analyst.

There are rumours that an increasing number of organisations and their boards are instructing CIOs to cut their IT budgets amid turbulent economic conditions but CIOs have been urged to hold firm to avoid wider negative business outcomes.

In the present day, IT is front office and revenue-generating, in contrast to the 1990s when it was strictly “back office” with IT cost cuts having less of a business impact, said Stewart Buchanan, VP analyst at Gartner.

He added that it’s now more difficult to cut costs without damaging a business’s performance considering how reliant companies are on IT.

If CIOs don’t have access to funding, it may not be possible to restructure the rising business costs meaning organisations will accumulate technology debt, mistaking inaction for a cost saving.

Moreover, if decision-makers decide not to increase a CIO’s budget because they’re worried about inflation, it won’t actually reduce the cost of IT or the business’s demand for technology, he argued in a written Q&A.

“In response to the current economic turmoil, organisations are using digital technology to realise operational efficiency and cost savings and to transform their company’s value proposition, revenue, and client interactions,” said Buchanan.

“This means a steady IT budget is necessary to push these digital business initiatives forward. In fact, Gartner forecasted that worldwide IT spending will increase 5.1% in 2023.

“Often the root cause of pressure to cut IT budgets stems from a failure to articulate the connection between technology spending and business outcomes. If the board or C-suite mandates technology spending cuts, the CIO should present a business view of IT spending against business performance."

To help executives understand the correlation between IT and positive business outcomes, CIOs may find it useful to draft a clear business view of IT spending as it will make for a more compelling case against cutting IT budgets.

For example, if customer relationship management software is helping to drive sales growth, it’s probably less likely to be cut.

CIOs also need to talk to business stakeholders to make them technology advocates at a board level. This could mean carrying out risk assessments to highlight how IT budget cuts could damage business performance, or even end up costing the organisation more money.

Buchanan underlined said emergency IT budget cuts were “rarely optimal” for organisations but advised CIOs that it’s fairly impossible to rapidly cut without incurring risks.

These risks need to be explained to stakeholders so that the responsibility is shared. Additionally, he said that CIOs should focus on how much IT spending can be reduced during the emergency time period and that reduction targets usually take priority over other goals until they have been met.

Meta has cancelled a number of planned internships due to macroeconomic headwinds, the latest in a string of wider cost-cutting measures taken by tech giants across the industry.

London-based internship candidates that had been due to begin in January were told via email that they will no longer be given places at the company as anticipated, which the company said was a result of economic pressures that it did not plan for when it made the offers.

The move is part of an overall reduction in 2023 Meta internships worldwide and the company has indicated that it will consider giving fresh offers to those affected as it evaluates its 2023 business operations.

“Meta interns are crucial in shaping our future,” said a Meta spokesperson to IT Pro. “This difficult decision was not made lightly. This company-wide hiring shift is to ensure that our hiring targets are aligned with our highest-priority efforts and business needs.”

Meta has faced internal pressure from investors to more clearly explain its investment costs, such as its Portal smart displays and Orion AR glasses. Additionally, privacy changes made by Apple earlier in the year will have cost Meta an estimated $10 billion dollars by 2023, as it will render Meta’s advertising technology less profitable.

Industry experts have reacted to the announcement with disappointment, with some arguing that in a market increasingly defined by its skills gap, companies cutting their graduate schemes are doing damage in the long term.

"It's a sad day when a tech company as big and as infamous as Meta is no longer taking on interns,” said Liam Reynolds, CEO at tech job fair Silicon Milkroundabout.

“It really does bring to sharp focus the challenge that grads and those just getting started on their careers are facing right now. They simply don't have access to the same opportunities that their counterparts would have done only a couple of years ago. And companies appear to be going in the wrong direction in trying to address this. The short term cost-cutting and shareholder appeasement is at the very human expense of investing in the next generation of talent.”

In recent months, a number of cuts and hiring freezes have been announced across big tech, with firms pointing to economic uncertainty as an explanation.

Microsoft has already looked at slowing its hiring, and cloud communications platform Twilio has announced an 11% workforce reduction, too.

Google has also reportedly cancelled its next Pixelbook range to save costs. With the economic crisis and the cost of living rising sharply, customer demand and stock prices are all in deeply uncertain territory.

Whether such immediate measures to cut costs will translate into a wider shift in industry hiring practice is uncertain. The speed with which big tech has reacted to economic shifts could be replicated with a shift back to workforce growth once economic turbulence has settled, and smaller firms could benefit in the meantime from a wider pool of applicants.

"Is this a longer-term problem? I don't think so," said Jeff Watkins, chief product and technology officer at xDesign. "We see these cycles of building headcount, reduction and then the inevitable spend on consultancies and outsourcing because the work isn't really going away, some of it just gets deferred.

“Bigger picture - the industry will continue to grow, it's just going to be painful for a while, especially if you're an intern or a junior."

Cloud communications platform Twilio has announced that 11% of its workforce will be cut, in a bid to improve company efficiency and raise profits.

The company made the announcement shortly after CEO Jeff Lawson sent an email to all employees warning them of the decision, with the email text copied out in a blog post in full. Improved focus and a re-examination of priorities to improve the profitability of investments were given as the primary reason for the layoff.

Those workers in the US impacted by the decision were notified within an hour of receiving the initial announcement email and given a meeting with their team leader or a human resource business partner. In Twilio’s other regions, employees were told they would receive an email within two hours of the announcement if they were included in the cut.

CNBC reports that Twilio had 7,867 employees at the end of 2021, and if similar numbers are employed by the company today some 865 employees will have been made redundant.

“We’ve made the extremely difficult decision to restructure and reduce Twilio’s workforce by approximately 11% – teammates and friends who helped build Twilio,” stated Jeff Lawson, Twilio CEO.

“I'm not going to sugarcoat things. A layoff is the last thing we want to do, but I believe it's wise and necessary. Twilio has grown at an astonishing rate over the past couple of years. It was too fast, and without enough focus on our most important company priorities. I take responsibility for those decisions, as well as the difficult decision to do this layoff.”

Affected employees will remain on the company payroll while they search for a new job, and receive at least 12 weeks of pay, plus a week for each year that they have worked for the company. Twilio has also committed to making a list of fired employees that can be shared with firms that are hiring and promises that it will attempt to “minimize” disruption for employees on sponsored work visas.

The move comes amidst a wide shift in the hiring speed and practices amongst big tech companies as countries experience cost of living crises of varying severity. In May, buy now pay later firm Klarna said that it would cut approximately 10% of its workforce, explaining that in 2022, it anticipated its budgeting was “a very different world than the one we have today.”

Additionally, tech giants such as Microsoft have indicated that they will change hiring practices in line with global economic headwinds, and reportedly Oracle is cutting jobs and internally reorganising. Google has reportedly cancelled its Pixelbook range and transferred the team that had been working on it, to reduce costs.

Counterintuitively, the economic uncertainty and reduction of staff across big names in tech could prove highly beneficial for small and medium-sized businesses (SMBs) in the sector, which are faced with the unique hiring opportunity of talented employees leaving larger firms in increasing volume.

According to data gathered by LearnBonds, 68% of major public and private organizations plan to increase their cybersecurity spending in response to the coronavirus pandemic.

Spending on cybersecurity has been on an upward trend for quite some time. In 2017, internet users spent $34 billion on cybersecurity solutions. Before the pandemic, that number was forecasted to hit $42 billion in 2020. Now, with cyberattacks on the rise since the onset of the coronavirus pandemic, LearnBonds expects that figure to increase by the end of the year.

With millions being forced to the confines of their home for the duration of the pandemic, many have taken to spending their extra time on the internet. Further, consider those who’ve transitioned to full-time remote work, and there is no doubt “these new circumstances created a huge space for cybercriminals to exploit the crisis,” as LearnBond claims.

Beyond boosting cybersecurity spending, 55% of major organizations will boost investments related to automation solutions. Another 53% have plans to invest in smart analytics, and 49% plan to boost spending on hybrid or multi-cloud systems. Further, 46% of major organizations have marked artificial intelligence as a top IT spend for 2020.

The Internet of Things, 5G and edge computing, on the other hand, have seen a stall in spending. Though telecommunication firms have leveraged these technologies in response to an increase in remote work, an increase in cybersecurity spending often means making cuts in other areas for large and small organizations.

The IoT, 5G and edge computing aren’t the only technologies experiencing cuts in spending either. While recent years have seen increases in the use of AI, LearnBonds’ research shows that AI solutions will see a massive drop in spending this year, with 23% of major businesses making cuts to their investments in such technologies.

According to data gathered by LearnBonds, 68% of major public and private organizations plan to increase their cybersecurity spending in response to the coronavirus pandemic.

Spending on cybersecurity has been on an upward trend for quite some time. In 2017, internet users spent $34 billion on cybersecurity solutions. Before the pandemic, that number was forecasted to hit $42 billion in 2020. Now, with cyberattacks on the rise since the onset of the coronavirus pandemic, LearnBonds expects that figure to increase by the end of the year.

With millions being forced to the confines of their home for the duration of the pandemic, many have taken to spending their extra time on the internet. Further, consider those who’ve transitioned to full-time remote work, and there is no doubt “these new circumstances created a huge space for cybercriminals to exploit the crisis,” as LearnBond claims.

Beyond boosting cybersecurity spending, 55% of major organizations will boost investments related to automation solutions. Another 53% have plans to invest in smart analytics, and 49% plan to boost spending on hybrid or multi-cloud systems. Further, 46% of major organizations have marked artificial intelligence as a top IT spend for 2020.

The Internet of Things, 5G and edge computing, on the other hand, have seen a stall in spending. Though telecommunication firms have leveraged these technologies in response to an increase in remote work, an increase in cybersecurity spending often means making cuts in other areas for large and small organizations.

The IoT, 5G and edge computing aren’t the only technologies experiencing cuts in spending either. While recent years have seen increases in the use of AI, LearnBonds’ research shows that AI solutions will see a massive drop in spending this year, with 23% of major businesses making cuts to their investments in such technologies.

It probably comes as no surprise that when asked about their favourite part of the job, very few senior IT leaders mention budgets. It’s easy to see why; on top of being somewhat dull and time-consuming, a lack of budget and investment is one of the most common complaints from CIO, CTOs and CISOs.

IT professionals are often forced to make do with fewer resources than they would like, stretching those resources to cover multiple competing business priorities and objectives. In this month’s IT Pro Panel, we asked our expert panellists how they managed their budgets, what types of spending they prioritise, how they make sure they’re using their resources efficiently and what happens when the money runs out.

Where does all the money go?

The first thing to consider when looking at budgets is where all of that money actually goes and unsurprisingly, the answer is different for different organisations. For Ian Thornton-Trump, CompTIA global faculty member and former European head of cyber security for AmTrust International, there’s rarely much money devoted to exploring new projects and the vast majority tends to go towards existing costs such as staffing.

“70% of your spend is on people and probably 20% is on renewals of your existing security controls, and/or annual expenses like pentest or audits. So you maybe have 10% of your total budget to ‘try new things’,” he explains. “Otherwise you need to be really good at using other people’s budget to get them to bake in some cyber security; I once built an entire data centre by using other parts of the company’s budget.”

William Hill group CISO Killian Faughnan, by contrast, spends the majority of his budget on tooling rather than staff. He notes, however, that he always finds it easier to obtain additional investment for new tooling than for new staff. This is an experience shared by Chris Stanley, IT manager for ICC Wales.

“I agree with Killian,” he says, “headcount seems a lot harder to get signed off over projects which are initially a lot more costly. Maybe it’s because hardware can be written off over a period of time, whereas personnel would cost more year on year thanks to wage inflation, tax and pension contributions.”

If you need extra staff resources but have maxed out your budget, Thornton-Trump’s advice is to work with other business units to find enough money for a contractor. Once you have a great contractor who can demonstrate the benefits of having someone to perform the role in question, he says, it’s easier to convince senior staff to authorise hiring a full-time employee.

“One difficulty I have is weighing up whether it’s better to invest in a new system that you know will have a positive effect on your business versus taking on additional staff members,” Stanley says. “There is so much technology in companies’ portfolios today, and it can be enhanced by employing staff to be more focused on maintenance and optimisation of the current systems.”

Regardless of whether budgets are weighted towards tools or people, when the two come together they bring another inevitable cost in the form of training. This is something that Thornton-Trump says he has seen multiple businesses caught off-guard by, particularly while undertaking projects with new technologies at the behest of business leaders. As he puts it, “no budget survives digital transformation”.

Cloud migration is a key example, and he points out that IT is often asked to make it happen with no budget for training or tools to do so. When these projects stall out or rack up unexpected costs to complete, he says, IT ends up getting the blame.

“It seems because cloud is ‘new-ish’, no one really knows the cost of migration, cost of operating and the costs of IT and security tooling.”

“I understand, Ian,” Stanley agrees. “The budget is agreed but ongoing training and improvement budget for these systems and projects can be harder to get signed off. It’s very frustrating when other business departments are making demands that we cannot support quickly enough.”

“Yes,” Thornton-Trump adds, “like when the proper investment has not been made and you’re trying to make an ancient system compatible with, say, an audit finding that service accounts must be 16 characters in length. Meanwhile, the application generates millions of dollars in revenue, the disaster recovery plan for it is ‘find parts on Ebay’ and the OS can't support a 16 character password.”

“I have taken the approach over the last few years to focus on automation and more convergence of systems where possible,” Stanley goes on. “I now find I have some fantastic technology but keeping up with continuous improvement is the challenge,” he says. “The sheer amount of software and updates means lots more training to keep staff on their A-game in supporting these applications, which again comes back to budget - and IT training isn't cheap!”

Stanley attempts to square this circle by asking vendors to include training as part of the cost of major contracts, but training isn’t something that Faughnan generally includes in his own budgets, saying that he’s “always found this as a central cost borne by HR (though usually with some extra around the edges when needed)”.

The place where budgeting gets a little more stressful, he says, is when the semi-elastic costs of cloud infrastructure start coming into play.

“The actual budgeting itself isn't an issue in general, though as Ian pointed out it gets less predictable once you start adding in cloud infrastructure - in particular, things that need dynamic scaling. There are options to help manage these better, but this does mean that you need to budget for a tool to help manage and predict your cloud budget.”

Splurging and saving

Faughnan’s heavy use of cloud technology involves more financial considerations than simply elastic costs though, and he raises the point that reporting can get tricky when you’re working with the rest of the business via shared reporting systems – particularly given that running systems in different regions can involve working with different tax structures.

This raises the question of whether budgets should be weighted towards CapEx or OpEx, and there are arguments for both. CapEx-based models reduce the unpredictability of flexible cloud costs, but are also more rigid and rely on large investments which are then written off over the next several years. OpEx approaches, on the other hand, favour subscription-style payment plans due to the increased agility they offer.

“In terms of budget split, I tend to run OpEx-heavy budgets,” Faughnan says. “I've some CapEx but between the high percentage of our activities that are focused on maintaining 'business as usual' and the fact that SaaS spend is OpEx spend, I'm almost entirely OpEx now.”

Stanley, meanwhile, has only recently started shifting towards an OpEx model. He says that since adopting SaaS products like Office 365, the business has become a lot more open to OpEx. This kind of shift in attitudes can be incredibly helpful for IT teams; as he points out, the technical literacy of the board can play a huge role in getting projects signed off.

“If it's a system where there are obvious savings or profits from day one then these can be given the go-ahead at any stage of the year. It’s always difficult to get IT projects in when the people deciding the budget don't fully understand the technology, but that's where we have to be able to interpret for them.”

“I've never found it particularly difficult to get additional budget where needed,” Faughnan adds, “but I do have a tendency to bear down on getting the most out of what I've got before moving on to the next thing – which is something appreciated by most CFOs.”

Thornton-Trump, however, warns that there’s a “huge risk” of “crazy executives” throwing unexpected curveballs along the way, noting “those companies that are divesting or acquiring are a nightmare for security”.

These scenarios can be challenging, but the most difficult position for a CIO to be in when it comes to budgets is what happens when they get cut. Financial struggles can affect all but the luckiest organisations, and at some point, you’ll be forced to cut costs.

Faughnan says that the best way to reduce outgoings is to be tougher on price during contract renegotiations with vendors, as well as app consolidation. “Most businesses have more than one app that deliver broadly the same service,” he says.

Stanley finds that while the IT department usually isn’t the first in the firing line when it comes to redundancies, staff are more likely to be let go of than systems or applications, as the business is still “heavily dependent” on them. In these cases, he says, it’s a case of keeping both yourself and your team positive about the situation.

“If you're highly digital in terms of not just business support but also product development, it means you'll be carrying an awful lot more than heads in tech and any sufficiently large division will end up with at least some suboptimal distribution of resources,” Faughnan argues. “It's just a natural consequence of scale. Over time, things move from a planned to organic operating model, which after a time needs realignment, which usually involves a review of the organisation, which could end in a reorganisation, reductions or increases.”

Budgets might not be anyone’s favourite part of the job but at worst, they’re a necessary evil – and as Stanley says, they can even be kind of fun.

“It doesn't help the stress levels, that's for sure – but it can be exciting from the angle that you can see some projects that would make a massive difference to your business getting some momentum.”

If you're an IT leader who wants to join the IT Pro Panel, please email panel@itpro.co.uk.