Elon Musk’s bumpy first week at the helm of Twitter

Posted Nov 5, 2022, 9:15 AMUpdated Nov. 5, 2022, 9:19 a.m.

Dismissals in shambles, risky offers of subscriptions, hasty decisions questioned in real time on Twitter… Elon Musk has wasted no time in making his mark on the social network since his takeover at the end of October.

Elon Musk fired, Friday, November 4, “about half” of Twitter employees. The company, which had 7,500 employees until last week, would now have less than 4,000. The employees of the social network were informed by email on November 3 at the end of the afternoon that they would receive an email on their personal address if they were fired, and on their professional address if they still had a job.

In fact, many employees discovered that they had been laid off on Thursday evening, trying, in vain, to connect to their professional accounts. Some employees even learned the news because they were disconnected while attending a meeting with their co-workers, according to The New York Times.

” Want to vomit “

“Well, that sounds promising. I can’t access my emails. My Mac won’t turn on. Very grateful that it happens at three in the morning. I appreciate the delicacy of the timing guys,” commented, ironically, one of the employees on the platform.

Employees who kept their jobs – for now – were not necessarily happier. “I got the email… I still have my job,” announced one of them on Friday morning. “But I’ve spent the night watching talented, caring, hard-working people disappear from the system one after another and I don’t know what to say. »

She quotes one of her colleagues, even more concisely: “I was not fired. But I still want to vomit. In addition to the sadness of seeing their colleagues leave, Twitter employees who have not yet been laid off run the risk of being fired later “for misconduct”, which means that they are not entitled to their severance.

Price too high

Elon Musk acquired Twitter on October 28. He had agreed to buy it back in April, at a price of 54.20 dollars per share, or 44 billion dollars in all. This price is considered very, if not too high by experts, in the midst of a slowdown in the tech sector.

The boss of Tesla and SpaceX then sought to escape his obligations, which led the management teams of Twitter to sue him. Two weeks before the start of this legal procedure, which he was almost sure to lose, the billionaire finally decided to buy the social network at the agreed price.

13 billion debt

To carry out this acquisition, the billionaire went into debt to the tune of 13 billion dollars with a consortium of banks. The problem is that Twitter’s revenues are limited, and its profits often non-existent. The social network has been public for ten years, but it has only been profitable for two years, in 2018 and 2019. In the past two years, the platform has been in the red again.

Prior to its acquisition by Elon Musk, the company had relatively little debt. The debt burden was about $50 million a year. But after this acquisition, the social network will have to pay an annual tribute of one billion dollars to its creditors. This greatly exceeds the $633 million generated by Twitter operations last year.

$8 subscription

The boss of Tesla and SpaceX therefore has no choice. If he wants to repay his creditors, he is forced to cut Twitter’s costs and increase his revenue. He got down to it from the first week, in a chaotic atmosphere.

One of its first moves to increase revenue was to ask users whose profile had been “verified” by Twitter – be they journalists, academics, artists or politicians – to pay a subscription to maintain this distinction. After several reversals, he chose to set the price of this subscription at eight dollars per month.

But this verification procedure was invented for moderation purposes, so that Twitter users can recognize real accounts from fake ones. The system imagined by Elon Musk will not, a priori, make it possible to distinguish between a famous person and an impostor.

Leaked advertising?

Elon Musk’s strategy to make Twitter profitable also involved laying off half of the employees. Content moderation teams have also been affected. The problem is that a chaotic or non-existent moderation policy is likely to affect its revenue, scaring off advertisers.

“Removing ads from Twitter is a quick and painless decision for large groups, since the platform is not essential in their media strategy,” notes Jasmine Enberg, analyst at eMarketers. “Musk needs advertisers more than they need him. »

For now, many groups, including Volkswagen, General Mills, Pfizer, Mondelez International and General Motors, have paused their ad buying. But they could decide to leave the platform for good… which would put 90% of Twitter’s revenue at risk.

Elon Musk again sought to reassure advertisers on Friday evening. According to Yoel Roth, who leads the “trust and safety” team responsible for moderation on Twitter, only 15% of employees on his team have been dismissed. “Our moderation capabilities essentially remain in place,” he promised on the platform.

VIDEO – The sensational entry of Elon Musk into the premises of Twitter… armed with a sink

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