Mass layoffs, not paying office rent, auctioning items: How Elon Musk is cutting costs at Twitter
Elon Musk bought Twitter for a whopping $44 billion. Now, the 51-year-old ‘Chief Twit’ is adopting numerous cost-cutting measures in an effort to stave off the company’s bankruptcy
Since the takeover of Twitter in October, it’s been a rough ride for Elon Musk. A day after he lost his ‘world’s richest person’ title to Bernard Arnault, it has been reported that the new Twitter chief is devising multiple measures to stave off the company’s bankruptcy as well as retain his wealth.
From laying off half the staff to not paying rent, to even auctioning off items — Elon Musk is doing all that he can to cut costs at the social media giant.
Also read: Elon Musk’s warning of a sudden drop in Twitter followers
Here’s a look at how the world’s now second-richest man is trying to cut corners to make Twitter a profitable company again.
Mass layoffs and severance packages
Since his acquisition of Twitter, Elon Musk has gone on a firing spree, laying off half of the company’s employees. It was reported then that he had fired over 3,700 employees after his initial purchase of Twitter.
At the time, the employees were informed about their job cuts via email and many of them were just locked out of their systems.
As recently as three days back, he also dissolved its Trust and Safety Council, which included expert organisations who advised the company on issues such as online safety, harassment, child sexual exploitation and other important topics.
Several employees also resigned after Musk issued an ultimatum, asking them to commit to an “extremely hardcore” Twitter, going forward. The executive apparently said it will mean “working long hours at high intensity.” He added: “Only exceptional performance will constitute a passing grade.”
Amid these firings, there are also concerns now that Musk is planning on not paying them severance. According to federal and state labour rules, Musk had initially intended to compensate US-based employees for at least two months of pay and another month of severance pay.
However, his team is reportedly debating whether to pay for some of those months.
Additionally, many former employees are still awaiting the documentation that formally ends their employment with Twitter.
Also read: Who is Jim Baker, former top FBI lawyer, fired by Elon Musk over ‘Twitter Files’?
Unpaid office rent
As per a New York Times report, Elon Musk is yet to pay the rent on its San Francisco office or any of its other global offices.
The report claims that the Tesla owner and his advisers are hoping to renegotiate the terms of lease agreements due to their smaller workforce after mass firing last month.
Twitter has also received complaints from real estate firm Shorenstein, which owns the company’s San Francisco buildings.
Reimbursement to vendors
Besides the mass layoffs and rent payments, the 51-year-old CEO is also not authorising the hundreds of thousands of dollars in travel invoices that former Twitter executives had wracked up.
The New York Times has further reported that Twitter hasn’t paid a $197,725 bill for private charter flights made the week of Musk’s takeover.
He and his team have also instructed employees to not pay vendors.
Also read: Is Elon Musk planning to increase Twitter’s character limit to 4,000?
An auction to raise funds
Elon Musk, the new ‘chief Twit’, has also opted for out-of-the-box ideas to raise funds for the social media platform. On 12 December, it was reported the 51-year-old plans to sell Twitter headquarter items in an auction on 17 January.
The items on sale will include: a sizable statue of the Twitter bird, a projector, iMac displays, espresso machines, seats, and kitchenware. The auction offerings will also include loads of industrial kitchen equipment including refrigerators and pizza ovens. The beginning bids could be ranging from $25 to $50.
Subscription-based business model
Elon Musk is also betting on a subscription model, similar to Netflix and Amazon Prime’s mode, making verified users pay for their status. However, this has led to a wave of criticism.
The platform’s primary revenue generator until now were advertisers, since its strategy was based on advertising.
Twitter received payment from advertisers who wanted to promote their products or content on the platform. Additionally, the platform offered variety of services like data analytics, and customer service tools to help businesses connect with customers.
With inputs from agencies
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