Musk apparently open to cuts with Twitter
As he negotiated a $44 billion deal to acquire Twitter, Elon Musk told bankers that he would be focused on the social media company’s bottom line and floated the idea of cutting costs and jobs, according to people familiar with the matter.
On calls with teams of bankers before the deal was announced, Musk fielded questions on how he would generate financial returns at Twitter. While nothing is set in stone — and Musk himself had no access to Twitter’s nonpublic financials at the time — he specifically mentioned job cuts, said the people, who asked not to be identified because the details are private. He didn’t go into details about which departments or positions might be affected, the people said.
Musk also discussed ideas to monetize the platform and boost cash flow, including potential subscription services to drive recurring revenue, they said. While he’s said little publicly about how he plans to drive growth, he suggested earlier this month that he isn’t preoccupied with money. “I don’t care about the economics at all,” Musk said at a TED conference after making his offer to buy the company.
Everyone from employees to investors in Twitter are itching to know how Musk plans to run the company, which will be privately held once his $54.20-pershare transaction closes. Besides his public tweets on the matter, the world’s richest person hasn’t shared many details of what could change, and Twitter’s management didn’t hold an investor call with the release of quarterly earnings Thursday.
In the bare-bones statement
announcing the deal, Musk said he wants to make Twitter “better than ever” by “enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots and authenticating all humans.” Twitter CEO Parag Agrawal told employees Monday that it would be business as usual until the deal closes.
Musk didn’t make a similar presentation of his plans and ideas, including layoffs, to Twitter’s board, according to a person familiar with the matter. The board evaluated the deal primarily on its price, relative to Twitter’s own modeling of its future financial performance, the person added.
People briefed on the calls, which were part of Musk’s pitch to rope in financing banks, said the billionaire made it clear he would seek financial returns from the deal. He spoke about his track record at Tesla and Spacex as evidence that he knows how to transition companies to generate returns, one of the people said.
Musk also repeated some of the ideas he had tweeted about how to run the company. He spoke about a need for influencers and celebrities to be more active on the platform, the people said, echoing a tweet he sent this month about how music superstar Taylor Swift hadn’t posted in three months.
Representatives for Musk
didn’t respond to requests for comment. A representative for Twitter declined to comment.
Twitter said Thursday that it made $1.2 billion in revenue in the first quarter, slightly below estimates. The 16 percent gain in sales was the worst pace of growth in six quarters. The numbers were affected by the divestiture of Mopub, an ad tech platform, and would have otherwise been 22 percent.
Still, Twitter’s performance is in line with reports from Snap and Meta, which are grappling with lower advertising spending because of issues with supply chains, inflation and the ongoing war in Ukraine. Twitter’s shares closed at $49.11, well below Musk’s buyout offer.