Thousands of layoffs, platform changes, changes in the company. Elon Musk bought Twitter, Inc. for 44 billion dollars and the only thing that has happened since then, beyond the issue of account verification, bots, among other issues, is a wave of uncertainty.
According to a report from Bloombergin his first speech to employees, Musk said that “bankruptcy was a possibility if it didn’t start generating more cash”according to people familiar with the matter cited in the report.
The warning came amid a tumultuous start to Musk’s reign at the social media company — a two-week period in which he laid off half the staff, ousted most of the top executives and ordered the remaining employees. stop working from home.
An executive who until Thursday had emerged as part of Musk’s new leadership team, Yoel Roth, has left. Another, Robin Wheeler, also quit, but Musk convinced her to stay.
Twitter’s financial problems
While the purchase removed Twitter from the scrutiny of the public markets, Elon Musk took over the company with nearly $13 billion in debtwhich is now held by seven Wall Street banks that have been unable to offload it to investors.
The debt the company took on to finance the Musk purchase is leaving it with interest costs that, by one estimate, will increase to $1.2 billion a year.
Confidence in the company has eroded so rapidly that, even before Musk’s bankruptcy comments, some funds offered to buy loans for as little as 60 cents on the dollara price generally reserved for companies that are in financial difficulties.
In his speech to staff, Musk issued multiple stern warnings. Employees must prepare for 80-hour workweeks, there will be fewer office benefits like free food, and an end to pandemic-era flexibility that allowed employees to work from home.
“If you don’t want to come, accept the resignation”, he said, adding that “we all need to be tougher”.
Discussing Twitter’s finances and future, the fellow CEO of Tesla and SpaceX said the company urgently needed to move to make its $8 subscription product, Twitter Blue, be something users want to pay for.