Thousands of layoffs. Barely a week after he walked through the door of Twitter headquarters, and became the absolute master of one of the most important communication platforms in the world, Elon Musk has beheaded practically all of the main executives of the company and has begun to drastically cut the number of workers on staff.
“In an effort to put Twitter on a path to profitability, we will go through the difficult process of reducing our global workforce,” the social network said in an email shared yesterday with its workers. And these, according to the Bloomberg agency, have already counterattacked with a lawsuit filed in the San Francisco courts.
Cuts on Twitter, be that as it may, hardly take anyone by surprise. The tycoon himself already recognized last June in a conversation with the employees of the social network that the positions of those workers who did not “do useful things” for the company would be up in the air. We now know that the layoffs may affect more than 50% of the company’s 7,500 workers, and that among those chosen are the names of people who have made “valuable contributions” to the application.
Too big a debt
Since it was announced that Musk had reached an agreement to purchase Twitter for $44 billionthe tycoon, owner of other companies such as Tesla or SpaceX, has remarked that doing business not with Twitter is not among his main concerns.
“The reason I bought Twitter is because it is important for the future of civilization that it has a common digital town square,” Musk explained in an open letter to advertisers posted on his Twitter account. “That’s the reason I bought Twitter. I didn’t do it because it was easy. I didn’t do it to make more money,” settled the tycoon.
Be that as it may, the latest movements make it clear that the businessman is not willing to let the investment force him to put even a dollar that is not necessary out of his pocket. More considering that he must pay 1,000 million annually in interest for the loans it took out to buy the platform. And this money is higher than the total earnings that the application had throughout the year 2021.
Problems with the main business
In a conversation with ABC, Ferran Lalueza, professor of Communication at the Open University of Catalonia and an expert in social networks, points out that, in the end, «Musk is an entrepreneur. A businessman«: »You made the purchase with the idea of making the application profitable. My only question is whether the main objective is for the platform to generate a profit that allows it to pay off the enormous debt or, instead, increase the income of its other companies by taking advantage of Twitter as an influence platform«. That is to say: either more money or more money.
The tycoon’s interest in improving the economic performance of the platform is not only evident by looking at the layoffs, which are expected to affect 50% of the workforce. As soon as he landed, he started talking about the launch of new payment features and the establishment of a controversy fee of eight euros per month for accounts that want to be verified. Something that, really, will not have a great impact on the company’s accounts, considering that so far there are only 400,000 accounts of this type on the platform, the money obtained would not even reach 40 million dollars per year.
He has also been trying to reassure advertisers, who are concerned that Musk’s new content moderation policies, which have yet to come, will cause toxicity to rise on the platform. The businessman shared on Thursday that the income from advertising on the social network has fallen “massively”, and it should be remembered that these represent 90% of the economic muscle of the application.