$700M ‘BIRD’ BATH

Debt dragged Twitter

Elon Musk’s drastic decision to lay off half of Twitter’s workforce on Friday was driven by the company’s dire finances — with the now-private company on track to lose $700 million in 2023 if he hadn’t slashed costs, The Post has learned.

While the struggling social network posted a modest loss last year, interest payments on the massive debt Musk used to finance the $44 billion buyout deal will unleash a torrent of red ink in the coming year, sources close to the situation said.

Specifically, Twitter will be forced to pay interest on its nearly $13 billion in new loans that will amount to $1.3 billion per year, one banker close to the situation said. That’s more than Twitter’s typical yearly yield of $1.2 billion in earnings before interest, taxes, depreciation and amortization, or EBITDA — a key measure of profitability.

“The interest expense is higher than the EBITDA,” a banker close to the deal said. “That’s why he is laying people off.”

On top of the punishing interest payments, Twitter typically spent about $600 million on capital expenditures, a banker said. Subtract the interest and capital expenditures from Twitter’s EBITDA and the company is $700 million in the red.

It’s a classic nightmare scenario in the world of leveraged buyouts, sources added — with workers getting stiffed even as top execs who pushed for the overpriced deal are angling for massive payouts.

To make matters worse, big advertisers have been fleeing the app amid Musk’s antics, which included posting and then deleting an article detailing an unfounded conspiracy theory about the attack on House Speaker Nancy Pelosi’s husband.

General Motors, Audi, General Mills are among firms that have paused Twitter advertising in recent weeks.

Activist pressure

“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation,” Musk tweeted in part Friday. “Extremely messed up!”

Meanwhile, banks that helped finance Musk’s takeover deal are bracing for heavy losses as they struggle to sell off loans.

In late October, Barclays was selling its stake of the $12.7 billion of loans Twitter borrowed to finance the deal at 80 cents on the dollar, one source with direct knowledge said.

Representatives for Musk did not return calls. Lead Twitter lender Morgan Stanley declined to comment, as did Barclays.