Elon Musk warns Twitter staff that ‘bankruptcy not out of the question’: report

Elon Musk, in his first address to Twitter employees since purchasing the company for $US44 billion ($68 billion), said that bankruptcy was a possibility, according to a person familiar with the matter.

Yoel Roth and Robin Wheeler, two executives who had emerged as part of Elon Musk’s new leadership team, have resigned, according to another person familiar with the matter, who asked not to be identified discussing non-public information.

Elon Musk has painted a bleak economic future for Twitter.Credit: Bloomberg

Musk pushed out most of the social network’s top executive team when his acquisition closed last month. Roth had since taken over all of the social network’s Trust and Safety efforts, while Wheeler, a sales vice president, had recently stepped up to oversee relations with jittery advertisers concerned about content.

The social network has a significant debt burden from the acquisition, and has seen a pullback from some advertisers that are concerned about Musk’s plans for content moderation. The Information and Platformer earlier reported Musk’s bankruptcy statement.

Musk also told staff on the call that the days of free food and other perks are over at Twitter’s offices, the person said.

In discussing Twitter’s finances and future, Musk said the company needed to move with urgency to make its $US8 subscription product, Twitter Blue, something users will want to pay for given the pullback by advertisers impacting revenue.

In a late email on Wednesday (US time), Musk warned employees of “difficult times ahead” and ended employees’ ability to work remotely unless he personally approved it.

“Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message,” wrote Musk, before he described a bleak economic climate for businesses like Twitter that rely almost entirely on advertising to make money.

“The economic picture ahead is dire,” Musk said.

“Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn. We need roughly half of our revenue to be subscription.”

An executive last week said Twitter was cutting roughly 50 per cent of its workforce, which numbered 7,500 earlier this year.

Musk had previously expressed distaste for Twitter’s pandemic-era remote work policies that enabled team leaders to decide if employees had to show up in the office. On Wednesday, he ordered all employees to return to the office on Thursday.

Musk told employees in the email that “remote work is no longer allowed” and the road ahead is “arduous and will require intense work to succeed.” He said he would personally review any request for an exception.

Elon Musk has ordered all remote Twitter workers back to the office. Credit: AP

The billionaire recently cut half of Twitter’s staff and introduced dramatic changes to its subscription rules. On Thursday, the changes resulted in multiple major advertisers and celebrities getting impersonated by accounts with blue check marks, indicating verification.

Twitter hasn’t disclosed the total number of layoffs across its global workforce, but told local and state officials in the US that it was cutting 784 workers at its San Francisco headquarters, about 200 elsewhere in California, more than 400 in New York City, more than 200 in Seattle and about 80 in Atlanta.

Cybersecurity expert Alex Stamos, a former Facebook security chief, tweeted on Thursday that there is a “serious risk of a breach with drastically reduced staff” that could also put Twitter at odds with a 2011 order from the Federal Trade Commission that required it to address serious data security lapses.

“Twitter made huge strides towards a more rational internal security model and backsliding will put them in trouble with the FTC” and other regulators in the US and Europe, Stamos said.

The FTC said in a statement Thursday that it is “tracking recent developments at Twitter with deep concern”.

“No CEO or company is above the law, and companies must follow our consent decrees,” said the agency’s statement. “Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”

Bloomberg, AP

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