Fired more than 3,000 people, owed money to suppliers, Elon Musk boasts ‘Twitter’s financial situation has improved’

Elon Musk says Twitter’s finances are recovering after advertising revenue fell 50%. This is one of Musk’s first public revelations about the state of the social media company since his acquisition last year.

Speaking at a conference hosted by Morgan Stanley in San Francisco on Tuesday, Musk, the new owner of Twitter, said he had taken drastic measures to improve the company’s financial position, cutting approximately $3 billion in operating costs reduction. After the cuts, the company is likely to have positive cash flow in the second quarter.

In an interview conducted by Michael Grimes, a Morgan Stanley banker who helped broker Musk’s $44 billion acquisition of Twitter, the billionaire said the company would go bankrupt “in four hours” months” if no cost reductions are made. Since Musk’s acquisition ended at the end of October, he has laid off more than 3,750 employees, owed money, failed to pay suppliers and office leasing units, and eliminated costs. cloud computing fees and one of Twitter’s three main data centers.

“Without action, Twitter will see $6 billion in costs and $3 billion in revenue,” Musk said. He added that previous projections said costs were $4.5 billion and revenue was $4.5 billion. Twitter recorded $5.1 billion in revenue in 2021 – up 37% from a year earlier.

However, Musk does not appear to be responsible for the change in the company’s financial outlook. The drop in ad sales, which accounted for about 90% of the company’s revenue in previous years, comes as advertisers pull back as brands worry about an increase in hate speech. enemies and misinformation.

He said the drop in advertising was part “cyclical” and part “political” and blamed it on advertisers’ fear of portraying the company in the media.

“Believe what you see on Twitter, not what you see in the newspaper,” Musk said.

Musk’s arrival comes after Twitter tackles a series of increasingly common outages and glitches under his ownership. On Monday, a bug prevented many users from clicking links, loading images, or accessing certain parts of the site.

Musk also spent part of Monday and Tuesday arguing on Twitter with a former employee. After Haraldur Thorleifsson, an employee at an Iceland-based design firm once acquired by Twitter, tweeted to the billionaire to clarify whether or not he was fired. Musk accused Thorleifsson of using his disability as an “excuse” for not working.

While Mr Thorleifsson said on Twitter that he had finally received confirmation that he had been fired, he was still waiting for word on whether he would receive “his contractual payments”. Because his company has been acquired by Twitter, Mr. Thorleifsson has higher compensation than most employees and is expected to be paid in full in the event he is fired.

“My company has been acquired and therefore I am obligated to work at Twitter for a certain period of time,” Thorleifsson said in an email to The New York Times. “I have complied with all aspects of my contract and now I need to wait and see if Twitter does the same.”

On Tuesday, before speaking at the Morgan Stanley conference, Musk continued his attack, calling Mr Thorleifsson “the worst”. However, Musk later deleted the tweet.

In a series of subsequent posts, Musk said he had a video call with Thorleifsson Tuesday afternoon and apologized for the “misunderstanding.” The billionaire said he asked Mr. Thorleifsson to return to work.

“Talking to people is better than communicating via tweet,” Musk wrote on Twitter.

Source: New York Times