Post by merh on Nov 11, 2022 6:57:00 GMT
Nov. 10, 2022
Updated 5:34 p.m. ET
SAN FRANCISCO — Two weeks after closing a $44 billion deal to buy Twitter, Elon Musk painted an increasingly bleak financial picture for the social media company and outlined a series of changes for employees in a meeting with staff on Thursday and in his first companywide emails, amid a continuing exodus of executives.
At the meeting on Thursday, Mr. Musk warned employees that Twitter did not have the necessary cash to survive, said seven people familiar with the meeting who spoke on the condition of anonymity. The social media company was running a negative cash flow of several billion dollars, Mr. Musk added, without specifying if that was an annual figure. He mentioned bankruptcy.
Mr. Musk added that he had recently sold Tesla stock to “save” Twitter. He has sold nearly $4 billion in Tesla shares recently, according to regulatory filings this week.
Even so, Mr. Musk said Twitter remained over-staffed after mass layoffs of half of the company’s 7,500 employees last week. Remaining workers needed to be more “hard core,” Mr. Musk said.
His statements echoed messages he shared in two emails sent to workers late on Wednesday. In those notes, Mr. Musk said “the economic picture ahead is dire.” He added that he planned to end Twitter’s remote work policy and wanted employees to renew their focus on generating revenue and fighting spam.
Twitter was too heavily dependent on advertising and vulnerable to pullbacks in brand spending, he added, and will need to bolster the revenue it gets from subscriptions. In another note to employees, he wrote that “the absolute top priority is finding and suspending any verified bots/trolls/spam.”
Mr. Musk has roiled Twitter since taking over the company in the technology industry’s largest-ever leveraged buyout last month. The billionaire, who also runs the electric-car maker Tesla and the rocket company SpaceX, is under pressure to make the deal work, having paid $44 billion for Twitter.
Changes at Elon Musk’s Twitter
A swift overhaul. Elon Musk has moved quickly to revamp Twitter since he completed his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a need for new products. Here’s a look at some of the changes so far:
Going private. As part of Mr. Musk’s acquisition of Twitter, he is delisting the company’s stock and taking it out of the hands of public shareholders. Making Twitter a private company gives Mr. Musk some advantages, including not having to make quarterly financial disclosures. Private companies are also subject to less regulatory scrutiny.
Layoffs. Just over a week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the company, including the engineering and machine learning units, the teams that manage content moderation, and the sales and advertising departments.
Verification subscriptions. Twitter said that it would begin charging customers $7.99 a month to receive a coveted verification check mark on their profiles. But the rollout was delayed until after the midterm elections after Twitter users and employees raised concerns that the new pay-for-play badges could be misused to sow discord.
Content moderation. Shortly after closing the deal to buy Twitter, Mr. Musk said that the company would form a content moderation council to decide what kinds of posts to keep up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.
Other possible changes. As Mr. Musk and his advisers look for ways to generate more revenue at the company, they are said to have discussed adding paid direct messages, which would let users send private messages to high-profile users. The company has also filed registration paperwork to pave the way for it to process payments.
But Twitter had lost money for eight of the past 10 years and its revenue growth has not been as robust as competitors. Mr. Musk also loaded the company with $13 billion in debt for the buyout, and it is now on the hook to pay $1 billion in interest payments annually. Mr. Musk has previously said the company is losing $4 million a day.
Twitter, whose communication department has been laid off, did not respond to a request for comment. Bloomberg earlier reported Mr. Musk’s emails.
On Thursday, more Twitter executives resigned. They included Kathleen Pacini, a human resources leader; Yoel Roth, the head of trust and safety; and Robin Wheeler, an advertising executive, according to four people familiar with the matter.
That followed the resignations of three top Twitter executives responsible for security, privacy and compliance on Wednesday, according to two people familiar with the matter and internal documents seen by The New York Times.
The departing security executives were Lea Kissner, the chief information security officer; Damien Kieran, the chief privacy officer; and Marianne Fogarty, the chief compliance officer. They resigned a day before a deadline for Twitter to submit a compliance report to the Federal Trade Commission, which is overseeing privacy practices at the company as part of a 2011 settlement.
Twitter has typically reviewed its products for privacy problems before rolling them out to users, to avoid additional fines from the F.T.C. and remain in compliance with the settlement. But because of a rapid pace of product development under Mr. Musk, engineers could be forced to “self-certify” so that their projects meet privacy requirements, one employee wrote in an internal message seen by The Times.
“Elon has shown that he cares only about recouping the losses he’s incurring as a result of failing to get out of his binding obligation to buy Twitter,” the employee wrote. The changes to Twitter’s F.T.C. reviews could result in heavy fines and put people working for the company at risk, the person warned.
“This will put huge amount of personal, professional and legal risk onto engineers: I anticipate that all of you will be pressured by management into pushing out changes that will likely lead to major incidents,” the employee wrote.
“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, a spokesman for the F.T.C., said in a statement. “No C.E.O. or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
Twitter earns about 90 percent of its revenue from advertisers, some of whom have shied away from the platform in recent days because of uncertainties over Mr. Musk’s commitment to removing toxic content from Twitter. He has responded by threatening a “thermonuclear name & shame” of advertisers who choose to halt their spending.
Mr. Musk has also raced to find new subscription revenue. One of his first projects was to revamp a subscription service, Twitter Blue. He raised the price to $8 a month and said subscribers would receive a verification check mark, which Twitter has typically given to prominent users like celebrities and politicians.
In one of his emails to staff on Wednesday, Mr. Musk said subscriptions should eventually account for about half the company’s revenue. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” he wrote.
Mr. Musk also told employees that they must return to the office on Thursday and work from there for a minimum of 40 hours a week. Twitter’s work force had been remote since early in the pandemic, and in recent years, its employees have been allowed to choose where they want to live rather than remaining in cities where the company has offices.
At some of Mr. Musk’s other companies, including Tesla and SpaceX, he has also said employees must go into the office to work 40 hours a week.
On Twitter’s Slack during Mr. Musk’s meeting with employees on Thursday, people discussed the merits of resigning or being laid off. “Don’t resign, be fired,” one worker wrote in a companywide channel, in a message viewed by The Times.
“Resignation is cheap and easy for the employer,” the employee wrote. “If you have a better plan lined up, go for it. If you are intimidated into considering resignation, don’t.”
www.nytimes.com/2022/11/10/technology/elon-musk-twitter-employees.html
Updated 5:34 p.m. ET
SAN FRANCISCO — Two weeks after closing a $44 billion deal to buy Twitter, Elon Musk painted an increasingly bleak financial picture for the social media company and outlined a series of changes for employees in a meeting with staff on Thursday and in his first companywide emails, amid a continuing exodus of executives.
At the meeting on Thursday, Mr. Musk warned employees that Twitter did not have the necessary cash to survive, said seven people familiar with the meeting who spoke on the condition of anonymity. The social media company was running a negative cash flow of several billion dollars, Mr. Musk added, without specifying if that was an annual figure. He mentioned bankruptcy.
Mr. Musk added that he had recently sold Tesla stock to “save” Twitter. He has sold nearly $4 billion in Tesla shares recently, according to regulatory filings this week.
Even so, Mr. Musk said Twitter remained over-staffed after mass layoffs of half of the company’s 7,500 employees last week. Remaining workers needed to be more “hard core,” Mr. Musk said.
His statements echoed messages he shared in two emails sent to workers late on Wednesday. In those notes, Mr. Musk said “the economic picture ahead is dire.” He added that he planned to end Twitter’s remote work policy and wanted employees to renew their focus on generating revenue and fighting spam.
Twitter was too heavily dependent on advertising and vulnerable to pullbacks in brand spending, he added, and will need to bolster the revenue it gets from subscriptions. In another note to employees, he wrote that “the absolute top priority is finding and suspending any verified bots/trolls/spam.”
Mr. Musk has roiled Twitter since taking over the company in the technology industry’s largest-ever leveraged buyout last month. The billionaire, who also runs the electric-car maker Tesla and the rocket company SpaceX, is under pressure to make the deal work, having paid $44 billion for Twitter.
Changes at Elon Musk’s Twitter
A swift overhaul. Elon Musk has moved quickly to revamp Twitter since he completed his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a need for new products. Here’s a look at some of the changes so far:
Going private. As part of Mr. Musk’s acquisition of Twitter, he is delisting the company’s stock and taking it out of the hands of public shareholders. Making Twitter a private company gives Mr. Musk some advantages, including not having to make quarterly financial disclosures. Private companies are also subject to less regulatory scrutiny.
Layoffs. Just over a week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the company, including the engineering and machine learning units, the teams that manage content moderation, and the sales and advertising departments.
Verification subscriptions. Twitter said that it would begin charging customers $7.99 a month to receive a coveted verification check mark on their profiles. But the rollout was delayed until after the midterm elections after Twitter users and employees raised concerns that the new pay-for-play badges could be misused to sow discord.
Content moderation. Shortly after closing the deal to buy Twitter, Mr. Musk said that the company would form a content moderation council to decide what kinds of posts to keep up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.
Other possible changes. As Mr. Musk and his advisers look for ways to generate more revenue at the company, they are said to have discussed adding paid direct messages, which would let users send private messages to high-profile users. The company has also filed registration paperwork to pave the way for it to process payments.
But Twitter had lost money for eight of the past 10 years and its revenue growth has not been as robust as competitors. Mr. Musk also loaded the company with $13 billion in debt for the buyout, and it is now on the hook to pay $1 billion in interest payments annually. Mr. Musk has previously said the company is losing $4 million a day.
Twitter, whose communication department has been laid off, did not respond to a request for comment. Bloomberg earlier reported Mr. Musk’s emails.
On Thursday, more Twitter executives resigned. They included Kathleen Pacini, a human resources leader; Yoel Roth, the head of trust and safety; and Robin Wheeler, an advertising executive, according to four people familiar with the matter.
That followed the resignations of three top Twitter executives responsible for security, privacy and compliance on Wednesday, according to two people familiar with the matter and internal documents seen by The New York Times.
The departing security executives were Lea Kissner, the chief information security officer; Damien Kieran, the chief privacy officer; and Marianne Fogarty, the chief compliance officer. They resigned a day before a deadline for Twitter to submit a compliance report to the Federal Trade Commission, which is overseeing privacy practices at the company as part of a 2011 settlement.
Twitter has typically reviewed its products for privacy problems before rolling them out to users, to avoid additional fines from the F.T.C. and remain in compliance with the settlement. But because of a rapid pace of product development under Mr. Musk, engineers could be forced to “self-certify” so that their projects meet privacy requirements, one employee wrote in an internal message seen by The Times.
“Elon has shown that he cares only about recouping the losses he’s incurring as a result of failing to get out of his binding obligation to buy Twitter,” the employee wrote. The changes to Twitter’s F.T.C. reviews could result in heavy fines and put people working for the company at risk, the person warned.
“This will put huge amount of personal, professional and legal risk onto engineers: I anticipate that all of you will be pressured by management into pushing out changes that will likely lead to major incidents,” the employee wrote.
“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, a spokesman for the F.T.C., said in a statement. “No C.E.O. or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
Twitter earns about 90 percent of its revenue from advertisers, some of whom have shied away from the platform in recent days because of uncertainties over Mr. Musk’s commitment to removing toxic content from Twitter. He has responded by threatening a “thermonuclear name & shame” of advertisers who choose to halt their spending.
Mr. Musk has also raced to find new subscription revenue. One of his first projects was to revamp a subscription service, Twitter Blue. He raised the price to $8 a month and said subscribers would receive a verification check mark, which Twitter has typically given to prominent users like celebrities and politicians.
In one of his emails to staff on Wednesday, Mr. Musk said subscriptions should eventually account for about half the company’s revenue. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” he wrote.
Mr. Musk also told employees that they must return to the office on Thursday and work from there for a minimum of 40 hours a week. Twitter’s work force had been remote since early in the pandemic, and in recent years, its employees have been allowed to choose where they want to live rather than remaining in cities where the company has offices.
At some of Mr. Musk’s other companies, including Tesla and SpaceX, he has also said employees must go into the office to work 40 hours a week.
On Twitter’s Slack during Mr. Musk’s meeting with employees on Thursday, people discussed the merits of resigning or being laid off. “Don’t resign, be fired,” one worker wrote in a companywide channel, in a message viewed by The Times.
“Resignation is cheap and easy for the employer,” the employee wrote. “If you have a better plan lined up, go for it. If you are intimidated into considering resignation, don’t.”
www.nytimes.com/2022/11/10/technology/elon-musk-twitter-employees.html
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