• Tech investor David Friedberg said Twitter's layoffs could encourage other companies to follow suit.

• Elon Musk laid off about 50% of Twitter's staff, while other tech companies have had more conservative cuts.

• However, Twitter has since asked some laid-off staff to return to the company.

Some of Elon Musk's closest associates are celebrating his decision to lay off about 50% of Twitter's staff.

Tech investor David Friedberg said Musk's cost-cutting measures at Twitter could quickly become a new Silicon Valley standard as companies struggle to address the economic downturn in the months to come.

The investor made the comments in the "All-In Podcast" on Saturday. Twitter staff were told to listen to the podcast episode to learn why layoffs were necessary, according to tech newsletter Platformer. Friedberg is one of four major investors that co-host the show.

"He shows the entirety of Silicon Valley that you can cut deep and you can turn a profit and you can do it fast," Friedberg said in the podcast. "It really kind of sets a new standard that a lot of folks might then end up saying, maybe we should go deeper," he added, referencing recent cuts at companies like Snap and Stripe that have slashed about 20% and 14% of staff, respectively.

Friedberg, who is currently the CEO of San Francisco-based investment firm The Production Board, said companies could quickly realize: "Wow, you don't actually need 50% of the workforce in order to keep the product running and to drive profitability."

David Sacks, a longtime friend of Musk and a member of the PayPal Mafia, said companies could easily cut their headcount in half if they returned to their plans before the pandemic "distorted" the economy.

"The point is you didn't have to do this when the rates were zero," billionaire investor Chamath Palihapitiya added. "There was just an abundance of free money and risk seeking that is now out of the market."

Ultimately, Friedberg argued that Musk's $44 billion Twitter purchase could catalyze a "flurry of violent activity" as more people "try to mimic the Elon playbook," including through initiating private buyouts.