Elon Musk Says Twitter May Face Bankruptcy As Key Executives Resign
Elon Musk says Twitter may face bankruptcy as key security executives resigned from the platform, drawing a sharp warning from US regulators.
The walkouts came a day after the turbulent launch of new features introduced by Tesla and SpaceX owner Musk following his $44 billion buyout of the influential messaging app.
Musk on Thursday warned employees that the site was burning dangerously through cash, raising the specter of bankruptcy if the situation was not turned around.
“I’ve made the hard decision to leave Twitter,” tweeted chief security officer Lea Kissner, who reportedly stepped down with other key privacy or security executives.
In the most extraordinary exit, US media reported that Yoel Roth, the site’s head of trust and safety stepped down just a day after staunchly defending Musk’s content moderation policy to advertisers.
The convulsions followed the unveiling of the site’s long-awaited Twitter Blue subscription service, which allows users to pay $7.99 per month for a coveted blue tick, as well as a separate gray “official” badge for some high-profile accounts.
But the release descended into tumult on Wednesday when Musk scrapped the new gray label almost immediately, overshadowing the launch of the pay service, which is currently only available on the mobile app on iPhones and in the United States.
The launch also saw the emergence of a flurry of fake accounts as users used the opportunity to impersonate celebrities and politicians such as NBA star LeBron James or former British prime minister Tony Blair.
Early media reports also said Robin Wheeler, who held a key role linking Twitter with advertisers and was considered a key Musk ally inside the company, was leaving but late Thursday she tweeted: “I’m still here.”
The chaos drew a rare warning from the Federal Trade Commission, the US authority that oversees consumer safety which had put Twitter under watch for past security and privacy breaches.
“We are tracking recent developments at Twitter with deep concern,” a spokesperson for the FTC said in a statement.
“No CEO or company is above the law, and companies must follow our consent decrees,” the spokesperson added, referring to past commitments by Twitter to obey US privacy rules.
Violating FTC decisions could cost Twitter millions of dollars in fines.
The 51-year-old entrepreneur fired half of the 7,500 employees of the California company a week ago, 10 days after buying the site and becoming its sole owner.
For the first time since the layoffs, Musk on Thursday addressed his remaining employees and urged them to help the site reach one billion users, according to employee text messages seen by AFP.
Musk also warned that the company was bleeding cash and expressed fear about the effects of the poor economy on his newly bought business.
“You may have noticed I sold a bunch of Tesla stock. The reason I did that is to save Twitter,” he is reported to have said.
Wedbush analyst Dan Ives meanwhile warned that the Twitter episode could have serious repercussions for electric car manufacturer Tesla.
“Brand destruction is our biggest worry with this Twitter circus show. It’s that simple and I can’t ignore it for Tesla stock,” Ives wrote on the site.
Twitter is also crippled by the decision of advertisers to stay away from the platform, concerned about Musk’s plans.
The tycoon announced he was ending work-from-home policies at Twitter, which had been a widespread practice at the San Francisco-based company.
“If you don’t show up at the office, resignation accepted,” he told employees.
Facebook Parent Company, Meta, To Lay Of 11,000 Staff
Facebook owner Meta will lay off more than 11,000 of its staff in “the most difficult changes we’ve made in Meta’s history,” boss Mark Zuckerberg said on Wednesday.
He said the cuts represented 13 percent of the social media titan’s workforce and would affect its research lab focusing on the metaverse as well as its apps, which include Facebook, Instagram and WhatsApp.The tech industry is in a serious slump and several major firms have announced mass layoffs — Twitter’s new owner Elon Musk fired half its staff last week.
“I want to take accountability for these decisions and for how we got here,” Zuckerberg said in a note to staff.
“I know this is tough for everyone, and I’m especially sorry to those impacted.” He added.
Ad-supported platforms such as Facebook and Google are suffering with advertisers looking to cut costs as they struggle with inflation and rising interest rates.
Zuckerberg told staff he had expected the boost in e-commerce and online activity during the Covid pandemic to continue, but added, “I got this wrong, and I take responsibility for that.”
The downturn has affected companies across the sector, with Apple and Amazon also recently announcing results that disappointed investors.
But Meta also faces some unique problems of its own.
Investors have been worried about Zuckerberg’s decision to devote billions of dollars to developing the metaverse, an immersive version of the web accessed via virtual reality headsets.
Zuckerberg renamed the company to Meta a year ago to reflect the commitment to the project, but the division working on metaverse technology has since made losses of more than $3.5 billion.
He has hinted several times this year that belt-tightening measures were just around the corner and said in his letter on Wednesday that staff layoffs were a “last resort”.
Meta would also keep a hiring freeze going into next year, he said, and other spending cuts were envisaged.
“Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently,” he wrote.
Last month, Meta announced profits of $4.4 billion in the third quarter, a 52 percent decrease year-on-year, causing its stock price to fall 25 percent.
Elon Musk To Lay Off Half Of Twitter’s Workforce
World’s richest man, Elon Musk, is set to lay off about half of Twitter’s global workforce.
The tech mogul, who acquired the company in late October, has been effecting massive changes in the administration of the platform ever since he took over.
In an email sent to Twitter employees on Thursday evening, it was announced that layoffs would begin immediately, and fired workers should not return to work on Friday, New York Times reports.
The mail read in part, “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global work force.
“We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward.”
Quoting anonymous sources, Bloomberg also reported on Thursday that coupled with firing half of its staff members, Musk was also planning to reverse the company’s existing work-from-anywhere policy.
Musk had earlier fired major executives in the company, including former CEO, Parag Agrawal; the Chief Financial Officer, Ned Segal; Chief legal officer, Vijaya Gadde; and general counsel, Sean Edgett.
Twitter To Charge $20 For Verification Badge
Reports have emerged of a proposed $20 monthly charge to be imposed on Twitter users with verification badge under the new ownership of Elon Musk.
According to a Daily Mail report, Musk wants to launch a pay-for-play verification system in which verified users are charged $20 per month.
Engineers at the micro-blogging company have until November 7 to launch the scheme or face being fired.
The project was communicated to employees on October 30.
The price of the verification is said to be subject to change.
Hours before the report emerged, Musk tweeted: “The whole verification process is being revamped right now.”