Elon Musk has big plans for Twitter — and they don’t involve nearly any of the company’s current employees.
via Yahoo:
The mega-billionaire has told potential investors in the Twitter deal that he plans to lay off almost 75% the company’s staff, or about 5,500 employees, to reduce the size of its workforce from 7,500 to just over 2,000, the Washington Post reported, citing anonymous sources and documents.
Reps for Twitter and Musk did not respond to requests for comment.
On Tesla’s third-quarter 2022 earnings call Wednesday, Musk said he was paying too much for Twitter. Earlier this month he agreed to go forward with his original $54.20/share offer for Twitter, after spending three months attempting to back out of the deal. “Although, obviously, myself and the other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter in my view is an order of magnitude greater than its current value,” Musk said.
Per the Post story, Twitter management had planned to cut its payroll by $800 million by the end of 2023, representing a 25% reduction in headcount. As such, Musk’s $44 billion acquisition is a “golden ticket for the struggling company,” according to the Post article, “potentially helping its leadership avoid painful announcements that would have demoralized the staff and possibly crippled the service’s ability to combat misinformation, hate speech and spam.”
Twitter general counsel Sean Edgett, in a memo to employees following the Washington Post story, said that the company has not had any plans for companywide layoffs since it signed the deal with Musk in April, according to a Bloomberg report. Edgett said discussions among Twitter leadership about potential layoffs occurred earlier in the year, prior to the Musk pact. “We do not have any confirmation of [Musk’s] plans following close and recommend not following rumors or leaked documents but rather wait for facts from us and the buyer directly,” Edgett wrote, per the report.
In a June 16 Q&A with Twitter employees, Musk said there needs to be a “rationalization of headcount,” and said: “Anyone who is a significant contributor should have nothing to worry about.” That was before Musk tried to exit the deal in early July, whereupon the company sued him, seeking to enforce the terms of the merger agreement. Musk evidently reversed course after realizing he would likely lose his legal fight with Twitter over the agreement.
The Delaware Chancery Court judge overseeing the case granted Musk’s motion to halt the trial until Oct. 28 to let him secure the debt financing he needs to close the deal.
Progressive groups are concerned that the right-leaning Musk may roll back Twitter’s policies restricting hate speech and misinformation. Musk has said he wants to make Twitter adhere to principles of “free speech” — and has accused the company of censoring conservatives.
Musk has also said he would reinstate Donald Trump’s account on Twitter, after the social network permanently banned him in the wake of Jan. 6 attack on the U.S. Capitol for violating its prohibition on incitement to violence after he praised the rioters. Musk called Twitter’s ban on the 45th U.S. president was a “morally bad decision” and “flat-out wrong.” YouTube, Facebook, Instagram, Twitch, Snapchat and other tech platforms also banned Trump for similar policy violations.
On July 8, Musk’s lawyers notified Twitter that was terminating the deal, alleging the company “appears to have made false and misleading representations” that represented a breach of the agreement. Among other things, according to Musk, his team’s preliminary estimates of the proportion of spam and fake accounts on Twitter were “wildly higher” than the sub-5% figure that Twitter has repeatedly claimed.
Twitter’s attorneys have accused Musk of having buyer’s remorse and claimed he wanted to renege on the deal after a drop in the price of Tesla’s stock (which represents the bulk of Musk’s net worth).
Twitter already struggles as it is — we can’t imagine what will happen with a 75% reduction in employees.
The post Elon Musk Reportedly Plans to Lay Off Nearly 75% of Twitter Employees, or 5,500 Staffers appeared first on LOVEBSCOTT.
