Twitter boss named Elon Musk to fire half of the employees as a cost-cutting measure. According to the Bloomberg News, Reuters, and other media reports, Elon Musk plans to lay off approximately 3,700 people at Twitter, accounting for roughly half of the company’s workforce.
Employees began to learn whether they would be laid off on Friday, with some tweeting about their situation with the hashtag #OneTeam.
“It appears that I am no longer employed. Just had my work laptop remotely logged out and also removed from Slack the “Simon Balmain, a former community manager based in the United Kingdom, tweeted about it. “It’s a shame it had to end like this way.”
The cost-cutting push comes just a week after Tesla CEO Elon Musk took severe control of the social media company following the completion of his $44 billion purchase of Twitter. Musk also immediately fired the Twitter CEO Parag Agrawal, the current company’s chief financial officer and top lawyer, as well as other members of its leadership team.
Twitter did not respond immediately to a particular request for comment on the job cuts.
Wedbush analyst Dan Ives told CBS MoneyWatch that Musk overpaid for Twitter by about $20 billion, which would force the billionaire to lay off 30% to 50% of the company’s employees. Twitter lost $270 million in the most recent quarter, and revenue fell as advertising growth slowed.
“By overpaying for Twitter by roughly $20 billion, Musk has a lot of wood to chop in order to recoup his money for himself and his investors,” Ives said.
Bloomberg also reported that Musk intends to reverse the company’s current policy of allowing employees to work from home, noting that most employees will be required to report to offices.
Elon Musk claims that Twitter’s revenue has dropped significantly as advertisers cut back on spending.
Twitter has seen a “big drop in revenue” as advertisers pause spending on the social media platform, according to Twitter and Tesla CEO Elon Musk, who did not provide figures.
Major corporations such as General Mills, Audi, and General Motors announced that they would temporarily halt their advertising on Twitter to see how things would change under Musk’s ownership.
According to ad analytics platform MediaRadar, Twitter’s ad revenue had been declining before Musk’s takeover and before civil society organizations began pressuring brands.
Twitter has also seen a “major drop in revenue” as advertisers pause spending on the social media platform, according to Elon Musk, the company’s new owner, who did not provide figures.
The CEO of Tesla, Twitter, and SpaceX blamed “activist groups pressuring advertisers” in a tweet. He stated that Twitter’s content moderation strategy has not changed, and that the company has also done “everything we could do to appease the activists.”
Musk did not say how much revenue the company has lost as a result of the pullback, or how he was also able to attribute that loss to activist pressure.
Musk reiterated his position in an interview at the recent Baron Investment Conference on Friday.
“We’ve made no changes to our operations,” Musk said during the event. “And we’ve tried everything to appease them, but nothing has worked.” As a result, this is a major concern. And, frankly, I believe this is an immediate attack on the First Amendment.”
Since he took over on Oct. 28, Twitter has fired or laid off roughly half of its employees.
Several companies have announced that they will temporarily halt their advertising on Twitter to see how things change under Musk’s ownership. Tesla rivals General Motors and Audi, as well as food giant General Mills, have all suspended Twitter spending. IPG advised clients to then temporarily pause their Twitter media plans, but it’s unclear how many clients followed IPG’s advice.
According to communications obtained by CNBC, Twitter informed employees Thursday evening that it would then begin laying off employees. Twitter’s content moderation team is also expected to be among those laid off, according to Reuters, citing employee tweets.
CNBC has also learned that significant cuts were made to Twitter’s global marketing team, which is in charge of reporting and metrics related to ad performance, sales performance, and spam, among other things.
Musk, who now refers to himself as the “Chief Twit,” met with a group of civil society leaders earlier this week to address concerns about hate speech and also election-related misinformation on the platform.
Since Musk took over, online trolls and bigots have raided Twitter, and hate speech has increased. Musk also tweeted, then deleted, a false and anti-LGBTQ conspiracy theory about a new home invasion and assault on Paul Pelosi, husband of House Speaker Nancy Pelosi.
Some of the organizations represented on Tuesday’s hour-long Zoom call have now signed an open letter to top Twitter advertisers, urging them to halt ad spending if Musk also fails to enforce the new company’s safety standards and community guidelines.
According to ad analytics platform MediaRadar, despite Musk’s claims of a latest revenue slump, Twitter’s ad spending had also been on the decline before his current takeover of the company was also complete, and also before civil society organizations began pressuring brands.
According to MediaRadar data, advertisers on platform Twitter also increased between April and May, around the time Musk’s plan to take Twitter private was announced, before declining. However, the platform’s average number of advertisers fell from 3,900 in the month of May to 2,300 in August. In September, it had 2,900 advertisers.
A small group of employees moved quickly to file a new class action lawsuit on behalf of Twitter employees in federal court in San Francisco.
The lawsuit claims that Twitter is firing employees without providing adequate notice, in violation of California and federal labor laws. Before conducting mass layoffs, the Worker Adjustment and also Retraining Notification Act, or a WARN, requires at least a 60-day notice.
The company declined to comment on the exact number of layoffs or which departments suffered the most, but an internal company email advised employees to again stay home Friday and wait for an email about their job prospects.
Employees used the hashtag #LoveWhereYouWorked to post about being laid off on Twitter.
They expressed gratitude to their teams and bosses, lamented the loss of the company culture they had enjoyed, and expressed concern about coworkers who might lose health insurance or work visas.
Other users chimed in, calling Twitter employees “government stooges” and criticizing content moderation and policy decisions made under the previous leadership of the company.
Musk has long been critical of Twitter’s workforce of approximately 7,500 people. Even as it struggled financially, the company had grown in recent years.
Musk fired many of Twitter’s top executives last week, including the company’s CEO, CFO, and top lawyers. He also dissolved its board of directors.
What changes has Elon Musk also made at Twitter, and what is he planning to do next?
Elon Musk’s approach to Twitter management since purchasing it has been as erratic as his timeline on the social media platform.
The world’s richest man has laid off employees, proposed a change to user verification, and is currently reportedly considering a number of changes that, if implemented, would represent a significant overhaul of the service. Here are the most significant changes he has made or is considering making.
Job losses
Twitter began laying off its 7,500-person workforce on Friday, amid reports that Musk intends to fire roughly half of them. “In an effort to also put Twitter on a new healthy path, we will go through the most difficult process of reducing our current global workforce on Friday,” according to an email to employees.
Musk raised just under $13 billion (£11.6 billion) in debt to help fund the purchase of a company that lost $221 million last year. Its new interest bill will be around $1 billion per year, so he must cut costs while increasing annual revenues to $5.1 billion in 2021.
Executive purge
Musk is now Twitter’s sole director, having disbanded the board, including chair Bret Taylor, and fired a number of new executives as soon as he also took over the company last week. Parag Agrawal, the CEO, Ned Segal, the CFO, and Vijaya Gadde then the head of legal then policy, and trust, were among those let go. As de facto CEO, Musk has assembled a team of associates to assist him in running the company, including his personal attorney, Alex Spiro, and tech investors Jason Calacanis and David Sacks.
Verification modifications
On Twitter, accounts of public interest have a blue tick next to their new name, confirming that they are also who they say they are; Musk has hinted that he plans to charge users for this privilege. More than 230 million people tweet every day, with approximately 420,000 having a tick next to their name.
Musk revealed on Tuesday that verification will cost $8 per month as part of a redesign of the platform’s premium service, Twitter Blue. “Twitter’s current lords & the peasants system for who has or who doesn’t have a blue checkmark is bullshit,” he tweeted. The people have the upper hand! Blue for $8 per month.”
According to the New York Times, the new-look Twitter Blue will be launched on November 7 in the United States, Canada, Australia, and also New Zealand (the only the countries where Twitter Blue is currently available), and that blue tick holders will not only lose their symbol even if they do not pay – though they will eventually if they do not pay.
Plans for content moderation and account reinstatement
Musk has promised that no changes to content policies, or the reinstatement of banned accounts such as Donald Trump’s, will be made until the newly announced content moderation council meets. He has stated that a new process overseeing account reinstatements will take at least “a few more weeks.”
It has also stated that it has been the target of a coordinated on trolling attack since the takeover and in which vexatious accounts attempted to create the impression that the site had become a free-for-all for hate speech. The platform had been also bombarded with hateful content – at least having 50,000 tweets – from 300 accounts, according to the company’s head of safety and integrity.
Various tiers
Musk has proposed dividing it into different content strands. He proposed that users choose which version of it they want, similar to how they would choose a movie based on its content rating. He also agreed with a user’s suggestion that the service be divided into different video game-style modes, such as a “player versus player” mode where verified accounts can engage in Twitter spats. A user could rate their posts, which would then be modified by “user feedback,” which sounds like a Wikipedia-style moderation approach.
Is Vine coming back?
On Monday, Musk launched a poll asking users if he should bring back Vine, the app that shared six-second-long videos and was seen as a precursor to TikTok but was shut down by Twitter in 2016. After nearly 5 million votes, the outcome was 70% in favor. The app’s code, however, has not been updated since 2016, and platforms such as TikTok and YouTube pose formidable competition.
Recruiting Tesla coders
The Twitter redesign is being guided in part by a team of Tesla software engineers and specialists. According to CNBC, two employees from Musk’s electric carmaker, the Boring Company, and one from his brain implant company, Neuralink, have joined more than 50 employees from Musk’s electric carmaker on Twitter. Tesla employees have been reviewing code at the company, according to the news outlet, as Musk pushes through his overhaul plans.
Advertiser placement
Musk is particularly concerned about one change: an exodus of advertisers. Given that advertising accounts for 90% of the company’s revenue, the Tesla CEO must keep them happy while attempting to increase revenue through other means. To that end, as the takeover was being finalized, he sent a message to advertisers saying he would not allow the site to become a hotbed of hate speech.
“Obviously, Twitter cannot become a free-for-all hellscape where anything can be said with no consequences,” he said. Nonetheless, advertisers have taken a break. General Mills, the maker of Cheerios and Lucky Charms cereals, announced a suspension of the advertising, joining General Motors and Audi in monitoring changes at the company before deciding whether to resume. Pfizer, the pharmaceutical company, is also said to have halted its advertising.
