Elon Musk Reveals Biggest Problem at Twitter After Taking Over

elon musk twitter sink

Elon Musk planned to start slashing jobs at Twitter as soon as Saturday, four sources with knowledge of the matter told The New York Times.

Musk closed his long-embattled $44 billion USD acquisition of Twitter on Thursday. According to three of the sources, Twitter’s new owner has ordered layoffs across the company, with some teams set to be downsized more than others. Some managers have already been instructed to create lists of employees to let go.

The scale of Musk’s planned job cuts at Twitter remains unknown. Previous reports indicated that Musk would slash Twitter’s workforce by 75% after taking over, but he denied having such plans during a visit to Twitter HQ. Twitter currently employs about 7,500 individuals.

Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, heard from the head of Musk’s family office, Jared Birchall, that layoffs were coming at Twitter. “I was told to expect somewhere around 50 percent of people will be laid off, said Gerber.

After sharing an autogenerated email from Twitter about a mandatory “Managing @Twitter 101” course on Sunday morning, Musk said redundant positions in management were “the one thing that’s most messed up” at the company right now.

“There seem to be 10 people ‘managing’ for every one person coding,” the eccentric entrepreneur said.

Musk is also testing Twitter’s engineers. Not only did he send Tesla engineers over to audit Twitter’s codebase, sources said he has assigned several projects to some of Twitter’s coders.

Musk started swinging the axe as soon as he took control of Twitter — he replaced Parag Agrawal as CEO of Twitter after firing the latter, CFO Ned Segal, and other high-ranking executives on Thursday.

The freshly-minted Twitter CEO’s planned layoffs appear to pre-empt a November 1 date when employees were slated to receive stock grants as part of their compensation.

Whether or not Musk is looking to avoid paying these grants by firing employees before that date is unclear, given the terms of his merger agreement with Twitter stipulate that these stock awards be replaced with cash.

The golden parachutes that Agrawal and other recently-fired Twitter executives were supposed to receive also seem to be in jeopardy. Musk’s deal with Twitter outlined $20-60 million for these executives if they were fired, but Musk terminated them “for cause,” which may render those terms void.

In a letter he shared on Thursday, Musk assured advertisers that Twitter will not turn into a “free-for-all hellscape” under his watch. He added that he will aspire to turn the social network into “the most respected advertising platform in the world.”

Musk was widely expected to soften Twitter’s content moderation standards, scrap lifetime bans, and bring back previously banned users like former U.S. President Donald Trump. However, he has revealed plans for a “content moderation council” at Twitter that will rule on content policy changes and account reinstatements (via Tesla North).

When he was assembling funding for the buyout, Musk promised investors he would double Twitter’s revenue within three years. Cutting expendable positions, growing Twitter’s advertising business, and finding new revenue streams could go a long way in doing so.

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