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

FP Explainers December 15, 2022 15:13:19 IST
Mass layoffs, not paying office rent, auctioning items: How Elon Musk is cutting costs at Twitter

Elon Musk loses his ‘world’s richest person’ title to Bernard Arnault. AP

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

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

Updated Date:

also read

Why anti-Semitism on Twitter more than doubled since Elon Musk took over

Why anti-Semitism on Twitter more than doubled since Elon Musk took over

A new research has revealed that since billionaire Elon Musk took over Twitter, the social media platform has seen a 'surge' in anti-Semitic content. The study showed that a total of 3,25,739 tweets from 1,46,516 accounts were labelled as 'plausibly anti-Semitic' from 1 June 2022 to 9 February 2023

When legacy dies: Twitter will start removing original or ‘legacy’ blue checkmarks from April 1

When legacy dies: Twitter will start removing original or ‘legacy’ blue checkmarks from April 1

Elon Musk-led Twitter has announced that starting April 1, the platform will start removing legacy blue ticks from originally verified accounts. Musk plans to amp up Twitter Blue and paid verification programmes, and may increase the price in the future.

Elon Musk puts $20 billion value on Twitter, says report

Elon Musk puts $20 billion value on Twitter, says report

Musk said in December that Twitter is on track to be 'roughly cash flow break-even' in 2023 as top advertisers slashed their spending on the social media platform after the billionaire's takeover