Musk reveals to investors that 75% of its workforce is fired when it acquires Twitter
The U.S. daily Washington Post (WP) reported on the 20th (local time) that social media Twitter is likely to reduce its workforce on a large scale regardless of who becomes the owner in the next few months.
According to the report, Elon Musk, CEO of Tesla, an electric vehicle company that is negotiating with Twitter, recently told potential investors that he plans to lay off about 75 percent of Twitter’s 7,500 employees and reduce the company to just over 2,000.
Twitter and Musk are scheduled to finalize the acquisition negotiations by the 28th. Once the deal is made, Musk immediately becomes the new owner of Twitter.
Even if Musk’s acquisition of Twitter is not completed, a large-scale reduction in manpower is expected, WP wrote. According to company documents and sources, Twitter’s current management planned to cut the company’s salary by $800 million by the end of next year. Converting this into the number of personnel, it is equivalent to a quarter of all employees. Twitter is also reported to be planning to fire data center employees who maintain the site function that more than 200 million people access every day.
Initially, Twitter executives have said several times that they have no immediate dismissal plans for their employees. However, when Musk attended a town hall meeting on Twitter in June and was asked about layoffs, he replied that he could not find a reason to continue hiring low-performing workers.
WP said the new details reflecting the situation over the past few months highlight the extreme nature of Musk’s planned Twitter innovation work.
Musk told investors that he plans to double Twitter’s sales within three years and triple the number of daily users who can see ads during the same period. He also told his aides that he believes that dramatically reducing Twitter’s size is the first step in bringing about efficient staff and profitable innovation.
WP pointed out that the size of Twitter’s workforce reduction explains why the company wants to hand over Twitter to Musk for $44 billion. It helps management avoid the painful announcement of workforce reduction that lowers employee morale.
I joined Twitter Edwin Chen, who is currently the CEO of Surge AI, a content coordination startup, said, “The impact of such layoffs can be felt immediately by millions of Twitter users,” adding, “I think there are too many employees on Twitter, but Musk’s proposed reduction is unimaginable.” He also argued that Twitter users are at risk of exposing them to aggressive materials such as hacking and child pornography.
Dan Ives, an analyst at Wedbush Securities, said, “The easy thing for Musk is buying Twitter, and the difficult part is fixing the company. He said, “It will be a huge challenge to reverse the situation.”
“If he (Musk) cuts manpower, he should be able to show something,” said Nell Minou, vice chairman of ValueEdge Advisory, a corporate governance expert. “What’s next?” he pointed out, “Are you going to replace manpower with AI?”
The WP reported that partners funding Musk’s acquisition of Twitter include Oracle co-founder Larry Ellison, former President Donald Trump’s supporter and hedge fund manager Ken Griffin, who made the second-largest donation to the Republican Party in the November midterm elections.