Elon Musk-Twitter Deal Nears Close; Massive Layoffs Coming: Report
After months of hurling lawsuits at each other and protracted public drama, both sides are now rushing to complete the transaction by an October 28 deadline issued by the Delaware Court of Chancery, where a case over the deal is currently on hold.
Musk and Twitter are communicating on better terms now, people familiar with the proceedings said. They are focused on finalizing the deal by the court deadline instead of litigation — which wasn’t the case until very recently.
What led to this reconciliation between the warring sides is anyone’s guess. After all, Musk isn’t one to let go of Twitter’s alleged understatement of bot account estimates as easily. The two sides were still going at each other even after Musk offered to go through with his acquisition of Twitter on the original terms earlier this month.
Whatever the case, bankers and lawyers from both sides are currently drawing up paperwork for the impending buyout. The banks backing Musk, led by Morgan Stanley, are in the process of finalizing $13 billion USD in debt commitments to finance the deal
Another report from The Washington Post indicated that Musk plans to cut Twitter’s workforce by about 75% in the months after he takes over. The social network currently employs around 7,500 staff, which Musk would throttle down to a skeleton crew of around 2,000.
Musk’s investor pitch deck for Twitter, which leaked earlier this year, outlined plans to aggressively cut jobs in the short term, refocus the company’s course, and ultimately grow its workforce to over 11,000 employees by 2025.
The celebrity billionaire also aims to double Twitter’s revenue within three years, which would be critical if he still plans to eventually relist the company publicly.
Even if the deal with Musk falls through, a significant portion of Twitter’s staff could still be out of a job. The company originally planned to slash its payroll by about $800 million by the end of 2023, which would amount to cutting roughly 25% of its workforce.
In addition, Musk has also suggested he’ll soften Twitter’s content moderation standards after taking over. This could allow for the return of former U.S. President Donald Trump and others who have been kicked off the platform for policy violations.
Rapper Kanye West, who was recently booted from Twitter for inflammatory and antisemitic remarks, could also make a comeback to Musk-ran Twitter.
If Musk and Twitter fail to close the deal by October 28, which is becoming increasingly unlikely, their trial will pick up where it left off in November.