Bay Area nonprofit Signal shows how bloated tech companies became

Signal, the messaging app run by a Bay Area nonprofit, counts Apple’s iMessage and Meta’s Messenger and WhatsApp as its main rivals. But a new report from Signal shows how it’s playing a different game entirely.

Signal serves tens of millions of users who are drawn to its end-to-end encrypted messaging platform. Yet it only has around 50 full-time employees, according to a report from the nonprofit released last week. That’s “shockingly small by industry standards,” Signal admits, but argues it’s a direct result of what makes it different from other apps. As a nonprofit, Signal doesn’t have the profiteering incentives that feed cycles of hiring and firing. It is funded entirely by donations.

The report is a glaring reminder that modern consumer technology, done well, doesn’t need all that many people to run it. Signal’s app offers video calls, messages and Instagram-esque Stories, all free to use and free from ads. The nonprofit is a leader in privacy research and never sells user data to advertisers, which is how other free products tend to make their money. By staying small, Signal has avoided having to make a sudden rush for cash, which can result in either dubious business strategies or layoffs down the line. Just a few dozen people (plus the third-party providers who sell tech tools to Signal) keep the globe-spanning messaging network up and running.  

Meanwhile: Meta has laid off at least 21,000 people in the last year, and still had 66,000 employees at the end of September. Google started the year with over 190,000 employees, laid off 12,000 in January and still has more employees than the island of Guam has residents. Meta’s market cap is larger than combined gross domestic products of Singapore and New Zealand. The companies we’ve come to associate with the tech industry more closely resemble nation-states than they do startups; Signal, on the other hand, is the size of a midtier family reunion.

Don’t get me wrong. These internet giants are extremely good at what they want to do, which is make so much money that every inch of company land from San Mateo to San Jose can be covered with stacks of hundred-dollar bills. That’s one of the reasons they have so many employees: Those engineers and designers and salespeople and product managers figure out cunning ways to grab every possible second of our attention, and wring every possible cent out of advertisers.

But the companies’ size deepens the problems they create. Workers are paid well, but at times bound with “golden handcuffs” as a result, as one former Google manager explained to Insider, describing how the company’s handsome compensation can make it hard for employees to leave even if they feel they’ve stagnated. Worse, employees can get stuck doing work that harms society. Their size erodes competition; Meta bought Instagram and Google bought the ad company DoubleClick, two investments that have allowed the companies to dominate web advertising — giving them unchecked power over a huge sector. That financial dominance lets the companies dump money into corporate moonshots like the Metaverse and autonomous cars with little accountability.

Perhaps the larger problem, though, is that their vastness inspires the rest of the tech industry, which sees Meta and Google as blueprints to huge financial success rather than as extreme outliers. WeWork founder Adam Neumann envisioned his company as an all-encompassing empire and himself as the world’s first trillionaire, the Wall Street Journal reported just before his mythos fell apart in 2019. Investors at Andreessen Horowitz were droolingly speculating about a new “Biggest Company in the World” as recently as last November. Venture capitalists who watched as our modern-day internet giants made their early investors very rich now want the same lucrative outcomes for this generation of companies so they can reap the rewards this time around. That means that as they dangle money in front of tech execs, they also urge them to grow-grow-grow, to push revenues higher and higher in the short term, even if it means spending heavily to add new workers and acquire competitors along the way.

That’s how we end up with a brutal year like 2023. Even smaller and newer companies in the industry had eye-popping head counts relative to the services they provide, leading to cut after cut after cut as companies realized the investment money spigots were slowing down. Video platform Zoom and payments processor Stripe both still have around 7,000 workers, after each cutting around 15% of their workers in the last year. Airtable, which makes customizable apps for online work, has laid off around 230 people two separate times this year even though its product seems tailor-made for the hybrid work model. Airtable’s CEO admitted to Forbes in September that his company’s strategy for a while was to recruit “as many smart people as we can and just throw them into the business and see what they can do.”

That’s bad business, bad for workers and bad for technological advancement. And it brings me back to Signal. In last week’s report, the writers said Signal believes in “an approach that puts privacy at the center, and where organizations are accountable to the people who use and rely on their services, not to investors, or to the endless pursuit of growth and profit.”

More organizations, whether nonprofit or for-profit, should focus on providing an important function in a sustainable manner, rather than growing for the sake of growth. That way, the Bay Area’s broad base of talent could be put to better use pushing technology forward. There are smart people here. Unfortunately, some of the greatest minds of my generation are stuck at overstuffed companies, trying to make a few more dollars for their bosses at the expense of anything else.

Hear of anything happening at Signal or another tech organization? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.