New YorkTwo weeks after buying Twitter, Elon Musk is already painting an increasingly bleak financial picture for the company. Tesla’s founder explained all the changes in a meeting with staff last Thursday and in his first emails to all workers, amid an exodus of managers, including executives overseeing content moderation and safety.
In that meeting, Musk warned employees that Twitter doesn’t have the money to survive, according to seven people familiar with the meeting who spoke on condition of anonymity. The social network has a negative cash flow of several billion dollars, Musk added, without specifying whether this is an annual figure. The businessman did mention bankruptcy.
Musk added that he had recently sold Tesla shares to “save” Twitter. The South African recently shed nearly $4 billion in shares of the electric car maker, according to regulatory filings this week. Still, Musk said Twitter remains overstaffed after mass layoffs of half of the company’s 7,500 employees last week. The workers who stayed with the company had to be more “hard-core”, he insisted.
Musk has warned staff that Twitter doesn’t have enough money to survive
That message was repeated in two emails he sent to Twitter workers Wednesday afternoon. In those notes, Musk said, “The economic landscape ahead of us is dire.” The billionaire added that he planned to end Twitter’s remote work policy and wants employees to renew their commitment to the goal of generating revenue and fighting thespam.
Twitter was too reliant on advertising and vulnerable to spending cuts by brands, Musk added, and will need to bolster the revenue it gets from subscriptions. In another statement to employees, the world’s richest man recalled that “the absolute priority is to find and suspend any bot/troll/spam verified.” Musk has shaken up the social network since taking over last month in the tech industry’s biggest leveraged buyout. The billionaire is under pressure to make the deal work, having paid $44 billion of dollars per Twitter.
Still, the social network has lost money for eight of the past ten years, and its revenue growth hasn’t been as robust as that of its competitors. Musk also saddled the company with $13 billion in debt to push through the purchase, and is now on the hook for $1 billion a year in interest payments. The tycoon had previously said the company loses $4 million a day.
Twitter, whose communications department has been fired, responded to questions for this article.
Copyright by The New York Times