It sounds annoyed, no doubt. The adjustment plan that Elon Musk started on Twitter is leading the social network to accumulate debts that, in some cases, amount to millions. So says a report The New York Timeswhich reveals that the tycoon has ordered that his new company suspend payments for services already receivedamong other controversial measures.
The spending cuts that Twitter has initiated in recent weeks have led to attacks on several fronts. The most controversial, by far, has been the reduction of personnel. But the San Francisco, California-based firm has also scrutinized costs for IT infrastructure, software services, staff relocations, real estate and cafeteria.
But passing the scissors in so many areas is not an easy task, not even for Elon Musk. Therefore, the businessman has turned to some of his main sides, whom he has “recruited” from Tesla and The Boring Company. According to the aforementioned report, the order of the new boss of the social network is only one: cut, cut and cut.
In this sense, the tycoon would have ruled that the finance area of Twitter reduce the rate of payments, or that, directly, suspend money transfers to service providers and contractors. The problem is that many of the services for which the company is not paying have already been received. Therefore, the delay in disbursements is arousing both internal and external complaints.
Elon Musk and his aggressive plan to cut expenses on Twitter
According to NYT, the debts that Twitter accumulates range, in some cases, from hundreds of thousands to millions of dollars. One of the edges most affected by Elon Musk’s decision is transportation, since the businessman has refused to pay for the transfer services used by the company’s previous managerswhen it was still led by Parag Agrawal.
Another section where the CEO of Tesla and SpaceX wants to stop spending is in real estate. Currently, Twitter rents offices in different parts of the world. But recent layoffs would allow it to dispense with some of the physical space currently considered a waste of money.
But the thing does not end there. Elon Musk wants the Twitter employees themselves to renegotiate the current agreements with firms that provide technology services, such as Oracle and Amazon. To the point of instructing them to threaten to cut ties permanently if they refuse to lower their prices.. An especially striking fact, considering that Larry Ellison, founder of Oracle, was one of Elon Musk’s main investors to buy the social network.
However, the outlook may not be entirely favorable for the Californian firm. The report mentions that the agreement with one of its software providers recently expired, already under the command of Musk, and that, by not reaching an agreement to renew it, Twitter lost a special discount that had been granted.
Goodbye to corporate cards
Beyond the external complaints about late payments, it is the Twitter employees themselves who are feeling the cut in expenses the most. In recent weeks they have not only lost access to free meals in company cafeterias, but also additional benefits such as discounts on telephone and internet, and child care services.
But there is something that shows even more clearly how Elon Musk’s austerity plan looks internally. Last week, when the businessman called engineers to an emergency meeting, he urged anyone not in San Francisco to fly to join the meeting in person. However, with the cancellation of corporate credit cards, many of them hesitated to buy the tickets with their own money, for fear of not being reimbursed.