Despite Twitter company executives repeatedly telling employees that there are no immediate layoff plans during town hall meetings over the past few months, The Washington Post reports that Musk is planning to make massive job cuts in the coming months.
According to interviews and documents obtained by WaPo – so take that with the pinch of salt it deserves – Musk told prospective investors in his deal to buy the company that he planned to get rid of nearly 75 percent of Twitter’s 7,500 workers, whittling the company down to a skeleton staff of just over 2,000.
Earlier this month, Steve Bannon shared during his sit-down interview with OANN New York correspondent Caitlin Sinclair that he had been informed by reliable sources that Twitter had offered Elon Musk a price cut in exchange for his commitment to two conditions.
The two conditions were as follows:
- Trump and other conservatives that were already banned should not be reinstated.
- The same management team will continue to be employed.
“My understanding is that Elon Musk was not prepared to do either one and said, NO, the deal is a deal,” Bannon said.
On Tesla’s third-quarter 2022 earnings call Wednesday, Musk said he was paying too much for Twitter. 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.”
After Musk tried to nix the deal to buy Twitter, the company sued him, seeking to enforce the terms of the merger 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.
Last week, Elon Musk was under investigation in regard to his Twitter acquisition, according to a report from Bloomberg News.
“Through counsel, he has exchanged substantive correspondence with those authorities concerning their investigations,” the said.
WaPo admits freely that, according to corporate documents and interviews with people familiar with the company’s deliberations, Twitter’s current management planned to pare the company’s payroll by about $800 million by the end of next year, a number that would mean the departure of nearly a quarter of the workforce.
Of course, WaPo also managed to find a number of ‘experts’ willing to damn Musk’s reported plan (apparently forgetting that 1) he already runs a number of successful companies very well, and 2) you don’t become the richest man in the world by making business decisions that would hurt the products that customers want.
For example, Edwin Chen, a data scientist formerly in charge of Twitter’s spam and health metrics, decried the reported cuts as “unimaginable”, putting users at risk of seeing child pron.
“It would be a cascading effect,” he said, “where you’d have services going down and the people remaining not having the institutional knowledge to get them back up, and being completely demoralized and wanting to leave themselves.”
Additionally, Nell Minow, a corporate governance expert who is vice chair of ValueEdge Advisors, said:
“He’s got to be able to show if he makes those cuts, what happens next? …What’s he gonna replace it with, AI?”
Yes, exactly! Or maybe he won’t need as many freshly minted marxists to judge whether Twitter’s content (child porn aside) is acceptable or not?
Twitter and Musk are expected to close the purchase by next Friday… so we will soon know. No tweets from Musk yet confirming or denying the cuts.
"I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror, and were suddenly silenced. I fear something terrible has happened."
— Rasmussen Reports (@Rasmussen_Poll) October 20, 2022
Elon Musk Plans to Lay Off Nearly 75% of Twitter Employees, or 5,500 Staffers (Report) https://t.co/4VRKHRualu