Elon Musk is Reportedly Planning to Offload About 75% of Twitter Staff
The Twitter workforce could shrink to 2,000 employees, a reduction of three-quarters from its present headcount of about 7,500 people.
The proposed acquisition of Twitter by technocrat Elon Musk could result in massive job cuts at the company. Musk reportedly plans to lay off as much as 75% of the Twitter workforce after he takes over.
According to a report from The Washington Post, the Twitter workforce could shrink to 2,000 employees, a reduction of three-quarters from its present headcount of about 7,500. Musk has previously signaled layoffs at the microblogging company, whose “costs exceed the revenue.”
However, a 75% cutback is a far cry from what the Twitter management planned, i.e., slashing payroll expenditure by $800 million by the end of 2023 at the expense of the jobs of 25% of the staff. In July 2022, Twitter offloaded 30% of its recruitment staff.
Musk, who believes Twitter needs to get financially “healthy,” agreed earlier in October to proceed with his original $54.20 per share offer for the company’s acquisition, amounting to $44 billion. The court-mandated deadline is set for October 28, 2022.
On Wednesday, during Tesla’s Q3 earnings call, Musk broached the subject of him and his coalition of investors “overpaying” for the social media major. “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,” he said.
Twitter’s net loss was $1.136 billion in 2020 and $221 million in 2021. More recently, the company’s revenue for Q2 2022 earnings declined 1% year-over-year to $1.18 billion, missing industry expectations by 11%. In the same quarter, Twitter registered a net loss of $270 million, higher than all four quarters combined in 2021.
See More: Tech Hiring: Is the Tech Job Boom Fizzling Out Amidst Layoffs?
At the same time, Twitter’s monetizable daily active usage (mDAU) for Q2 2022 stood at 237.8 million (396.5 million users in total). Musk has previously spoken about increasing mDAUs to one billion.
Musk plans to turn around Twitter’s fortunes by easing or changing the platform’s content moderation policies and reshuffling its business, which includes launching subscription-based services.
Edwin Chen, CEO at Surge AI, and formerly in charge of Ads & Integrity at Twitter, told The Post that layoff of this scale would have a “cascading effect” on services.
Twitter already has an underwhelming security culture, according to Peiter “Mudge” Zatko, who left rather unceremoniously in January 2022 after serving as Twitter’s head of security for just over a year. Zatko also alleged Twitter is not transparent about how it counts bots, among other things.
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