‘Economic Picture Ahead Is Dire,’ Elon Musk Tells Twitter Employees
SAN FRANCISCO — Two weeks after buying Twitter, Elon Musk painted an increasingly bleak financial picture for the company and outlined changes in a meeting with staff on Thursday and in his first companywide emails, amid an exodus of executives including the officials who oversaw content moderation and security.
At the meeting on Thursday, Mr. Musk warned employees that Twitter did not have the necessary cash to survive, said seven people familiar with the meeting who spoke on the condition of anonymity. The social media company was running a negative cash flow of several billion dollars, Mr. Musk added, without specifying if that was an annual figure. He mentioned bankruptcy.
Mr. Musk added that he had recently sold Tesla stock to “save” Twitter. He has sold nearly $4 billion in Tesla shares recently, according to regulatory filings this week.
Even so, Mr. Musk said Twitter remained over-staffed after mass layoffs of half of the company’s 7,500 employees last week. Remaining workers needed to be more “hard core,” Mr. Musk said.
His statements echoed messages he shared in two emails sent to workers late on Wednesday. In those notes, Mr. Musk said “the economic picture ahead is dire.” He added that he planned to end Twitter’s remote work policy and wanted employees to renew their focus on generating revenue and fighting spam.
Twitter was too heavily dependent on advertising and vulnerable to pullbacks in brand spending, he added, and will need to bolster the revenue it gets from subscriptions. In another note to employees, he wrote that “the absolute top priority is finding and suspending any verified bots/trolls/spam.”Mr. Musk has roiled Twitter since taking over the company in the technology industry’s largest-ever leveraged buyout last month. The billionaire, who also runs the electric-car maker Tesla and the rocket company SpaceX, is under pressure to make the deal work, having paid $44 billion for Twitter.But Twitter had lost money for eight of the past 10 years and its revenue growth has not been as robust as competitors. Mr. Musk also loaded the company with $13 billion in debt for the buyout, and it is now on the hook to pay $1 billion in interest payments annually. Mr. Musk has previously said the company is losing $4 million a day.
Twitter, whose communication department has been laid off, did not respond to a request for comment. Bloomberg earlier reported Mr. Musk’s emails.On Thursday, more Twitter executives resigned. They included Kathleen Pacini, a human resources leader; Yoel Roth, the head of trust and safety; and Robin Wheeler, an advertising executive, according to four people familiar with the matter. There was confusion about some executives, including when Ms. Wheeler wrote in an internal company message on Thursday afternoon, which was viewed by The Times: “I’m still here. This is really hard right now.”
That followed the resignations of three top Twitter executives responsible for security, privacy and compliance on Wednesday, according to two people familiar with the matter and internal documents seen by The New York Times.
The departing security executives were Lea Kissner, the chief information security officer; Damien Kieran, the chief privacy officer; and Marianne Fogarty, the chief compliance officer. They resigned a day before a deadline for Twitter to submit a compliance report to the Federal Trade Commission, which is overseeing privacy practices at the company as part of a 2011 settlement.
Twitter has typically reviewed its products for privacy problems before rolling them out to users, to avoid additional fines from the F.T.C. and remain in compliance with the settlement. But because of a rapid pace of product development under Mr. Musk, engineers could be forced to “self-certify” so that their projects meet privacy requirements, one employee wrote in an internal message seen by The Times.
“Elon has shown that he cares only about recouping the losses he’s incurring as a result of failing to get out of his binding obligation to buy Twitter,” the employee wrote. The changes to Twitter’s F.T.C. reviews could result in heavy fines and put people working for the company at risk, the person warned.
“This will put huge amount of personal, professional and legal risk onto engineers: I anticipate that all of you will be pressured by management into pushing out changes that will likely lead to major incidents,” the employee wrote.
“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, a spokesman for the F.T.C., said in a statement. “No C.E.O. or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”In an email to employees on Thursday afternoon, Mr. Musk wrote, “I cannot emphasize enough that Twitter will do whatever it takes to adhere to both the letter and the spirit of the F.T.C. consent decree.”
More on Elon Musk’s Twitter Takeover
- Tweeting Through the Criticism: Under tremendous scrutiny since buying Twitter, Elon Musk has embarked on a tweeting spree to push back, spar and justify his actions.
- A Familiar Playbook: In his first days at Twitter, Mr. Musk has been emulating some of the actions of Mark Zuckerberg, who leads Facebook, Instagram and WhatsApp.
- A Different Kind of Deal: Silicon Valley moguls used to buy yachts and islands. Now they are rich enough to acquire companies they fancy.
- ‘Hard Fork’: In an episode of The Times’s tech podcast, two Twitter employees described the atmosphere inside the company in the aftermath of the acquisition.
Twitter earns about 90 percent of its revenue from advertisers, some of whom have shied away from the platform in recent days because of uncertainties over Mr. Musk’s commitment to removing toxic content from Twitter. He has responded by threatening a “thermonuclear name & shame” of advertisers who choose to halt their spending.
Mr. Musk has also raced to find new subscription revenue. One of his first projects was to revamp a subscription service, Twitter Blue. He raised the price to $8 a month and said subscribers would receive a verification check mark, which Twitter has typically given to prominent users like celebrities and politicians.
In one of his emails to staff on Wednesday, Mr. Musk said subscriptions should eventually account for about half the company’s revenue. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” he wrote.
Mr. Musk also told employees that they must return to the office on Thursday and work from there for a minimum of 40 hours a week. Twitter’s work force had been remote since early in the pandemic, and in recent years, its employees have been allowed to choose where they want to live rather than remaining in cities where the company has offices.
At some of Mr. Musk’s other companies, including Tesla and SpaceX, he has also said employees must go into the office to work 40 hours a week.
On Twitter’s Slack during Mr. Musk’s meeting with employees on Thursday, people discussed the merits of resigning or being laid off. “Don’t resign, be fired,” one worker wrote in a companywide channel, in a message viewed by The Times.“Resignation is cheap and easy for the employer,” the employee wrote. “If you have a better plan lined up, go for it. If you are intimidated into considering resignation, don’t.”
