‘Losing $4m a day’: Musk attempts to justify hash cuts to Twitter

Less than 24 hours after gutting Twitter of half its staff, new owner Elon Musk has opened up about the perioulous financial predicament the platform is in.

According to its new owner Elon Musk, Twitter is losing US$4 million a day.

That’s how the tech billionaire has attempted to justify his decision to gut the platform of roughly half its staff.

“Regarding Twitter’s reduction in force, unfortunately, there is no choice when the company is losing over $4M/day,” he tweeted on Saturday.

“Everyone exited was offered 3 months of severance, which is 50 per cent more than legally required.”

Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.

Everyone exited was offered 3 months of severance, which is 50% more than legally required.

— Elon Musk (@elonmusk) November 4, 2022

In just a little over a week at the helm of Twitter, Musk has declared a “massive drop in revenue”, crying foul at advertisers and corporate activism.

Musk lashed out on Twitter at his critics – half the entire workforce – on Friday morning, US time.

“Twitter has had a massive drop in revenue due to activist groups pressuring advertisers, even though nothing has changed with content moderation, and we did everything we could to appease the activists,” Musk tweeted on Saturday morning.

“Extremely messed up! They’re trying to destroy free speech in America.”

Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.

Extremely messed up! They’re trying to destroy free speech in America.

— Elon Musk (@elonmusk) November 4, 2022

That, saddled with the purchase of Twitter, for which Musk has said he overpaid, the tycoon is looking for ways for Twitter to make money — and fast.

His most recent idea was to charge $8 a month to anyone on Twitter who would receive a blue “verified” badge assuring the public that the account is authentic.

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Elon Musk is already steering Twitter through huge debt as companies continue to pull ad revenue from the platform. Photo: Jim Watson

A news report this week said Musk wanted to charge $20 a month but faced a backlash, including from best-selling novelist Stephen King, who tweeted: “$20 a month to keep my blue check?”

It was followed by an expletive.

Musk responded on Twitter, seemingly bargaining with King: “we need to pay the bills somehow! Twitter cannot rely entirely on advertisers. How about $8?” Musk has said he wants to increase Twitter’s revenue from $5 billion last year to more than $26 billion in 2028.

Top global companies, including General Mills and Volkswagen, suspended their advertising on Twitter on Thursday as pressure builds on Musk to turn his platform into a successful business.

Some responded to Musk’s tweet on Saturday, telling him the platform had always been a poor user experience for advertisers - and Musk agreed.

“It’s because Twitter has the worst ad platform of any social media company. Its targeting and ad [return on investment] is so terrible that its virtually a black hole,” the user wrote.

Let's review. Musk went on a bender and offered to buy Twitter at a price based on a weed meme. Then he agreed to a binding agreement to purchase it. Apparently he didn't fully grasp how binding it was. Then he tried to get out of the deal. Twitter sued to force him to ...

— Josh Marshall (@joshtpm) November 4, 2022

“You only have people running fluff ads on Twitter, aka, no [return on investment] ads they can turn off. Fix this, and you’ll get all that money back,” they continued.

“Agreed. Working on it,” Musk responded.

And Musk’s Twitter takeover has perhaps proved more expensive than first thought,

Last week it was reported the world’s richest man took an instant $US10 billion hit to his roughly $US210 billion net worth when the deal was finalised - according to figures from Bloomberg.

Officials and civil rights groups have expressed worry that Musk will open the site to uncontrolled hate speech and misinformation and reinstate banned accounts, including that of former US president Donald Trump.

Advertisers are Twitter’s main source of revenue, and Musk has tried to calm the nerves by reassuring that the site would not become a “free-for-all hellscape”.

Musk’s brutal email to sacked staff

Barely a week after buying the company for US$44 billion (A$68bn), Musk began sacking as many as 3,700 people on Friday.

Australian staff, which number about 50, are affected as well as those at the San Francisco headquarters and other offices globally.

Its been reported that the entire Twitter team responsible for countering misinformation has gone. Musk himself tweeted out a conspiracy theory just last week.

The method in which the sackings have taken place – via email with staff locked out of offices and computers erased remotely – has incensed staff. One employee said the new Musk led regime at Twitter was akin to “psychological abuse”.

Elon Musk is set to sack half of Twitter’s 8000 strong workforce. (Photo by Frederic J. BROWN / AFP)

Already a class action has been launched against Twitter by several employees who have said they weren’t given enough notice of the mass lay-offs in violation of labour laws, reported the New York Post.

One UK employee said his work computer was wiped right in front of him at home before he was even told he was sacked. He said the screen flashed grey which was a sign its data was being remotely erased.

“You don’t wipe a laptop if you’re planning to keep somebody on”, he told the BBC.

Musk wasn’t even at Twitter’s California HQ when the sackings occurred. Rather he was at a conference in New York where he reportedly told the audience the price to buy the firm was on “the high side” and “I tried to get out of the deal”.

‘This action is unfortunately necessary’

Musk bought out Twitter eight days ago on October 27, immediately firing top executives and kicking out the board.

Now he’s getting to work on the firm’s 8000 other employees.

A company-wide message sent on Thursday said Twitter employees would receive word via email at the start of the business day on Friday, California time, as to what their fate was.

The email was unsigned by any Twitter executive, not even the human resources head.

“We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,” it stated.

Twitter said those employees being kept on would receive an email to their company account.

Those being let go would get an email to their personal account.

Brutal email sent from Twitter to employees about the sackings

The company then sought to justify why it wasn’t telling people in person of their fate.

“Given the nature of our distributed workforce and our desire to inform impacted individuals as quickly as possible, communications for this process will take place via email.”

It said everyone would receive an email on Friday with the subject line: ‘Your Role at Twitter’.

Twitter then stated all its staff would be locked out of its offices “to help ensure the safety of each employee as well as Twitter systems and customer data”.

“If you are in an office or on your way to an office, please return home.”

Looks like Elon Musk fired the entire curation team.

These were the folks who tackled misinfo, contextualized conversations via the 'Explore' page, and helped make Twitter an unmatched source for breaking news.

This will make Twitter noisier, more dangerous & less interesting

— Richie Assaly (@rdassaly) November 4, 2022

I was fired from Twitter this morning. I was responsible for reporting tweets for content abuse. #Twitter#TwitterLayoffs#exemployee

— Aakash Raina (@Albatross2356) November 4, 2022

‘Today is your last working day’

The lay off emails began filtering through on Friday morning.

To those let go, the email said “Today is your last working day at the company.”

The email went onto say that while they would be employed and paid as normal until February 2, 2023, this would be a “non working period” and they would not be expected to perform any tasks and all access to company systems would be disabled.

The non-working period is likely aimed to circumvent California law which requires employees to give 60 days notice of lay-offs.

The company warned employees not to “discuss confidential company information on social media, with the press or elsewhere”.

A tram passes Twitter headquarters in San Francisco, California. Justin Sullivan/Getty Images/AFP

‘Psychological abuse’

Many staff were scathing in their criticism of the procedure.

“The current lay-off process is a farce and a disgrace. Tesla’s henchmen are making decisions about people they know nothing about except the number of lines of code produced. This is completely absurd,” Taylor Leese, the manager of an engineering team who said he was fired, tweeted on Sunday.

“Honestly happy to be laid off, but the veil of Elon Musk is pierced,” staff member Kushal Dave said in a now deleted tweet.

“As messy as Twitter was pre-Elon, it is a veritable clown town of politics and toadyism and psychological abuse now.

“Just bad decision making as a business owner”.

Last Thursday in the SF office, really the last day Twitter was Twitter. 8 months pregnant and have a 9 month old.
Just got cut off from laptop access #LoveWhereYouWorked 💙 https://t.co/rhwntoR98lpic.twitter.com/KE8gUwABlU

— rachel bonn (@RachBonn) November 4, 2022

Has it already started? Happy layoff eve! pic.twitter.com/0AcaQjGJvm

— Rumman Chowdhury (@ruchowdh) November 4, 2022

Looks like I’m unemployed y’all. Just got remotely logged out of my work laptop and removed from Slack. #OneTeam forever. Loved you all so much.

So sad it had to end this way 💔

— Simon Balmain  (@SBkcrn) November 4, 2022

A workplace and employee review and other projects ordered by Musk were reportedly so exhaustive and gruelling that some engineers slept at Twitter headquarters over the weekend.

Lists comparing computer scientists with each other, mainly on the basis of production volume, were also drawn up, according to another employee.

Musk has not fully laid out his plans for Twitter. (Photo by OLIVIER DOULIERY / AFP)

– with Jack Evans and AFP.

Originally published as ‘Losing $4m a day’: Musk attempts to justify hash cuts to Twitter