Elon Musk says Twitter’s revenue plummeted when it went on strike.
Twitter Inc has suffered a “significant decline in revenue” as advertisers cut back on the social media platform, new owner Elon Musk said Friday, as the company began layoffs more than a week after the billionaire took over.
Mr Musk blamed the ad cuts on “activist groups pressuring advertisers” in a tweet on Friday. The company said it has not changed content moderation and has tried to address activists’ concerns. “So upset!” He said he backed off as soon as he struck his speech freely.
Mr. Musk’s comments came after several prominent advertisers, including food company General Mills. Inc.,
Oreo maker Mondelez International Inc.,
and Pfizer Inc.
And others have temporarily suspended their Twitter ads since Mr. Musk took control of the company, The Wall Street Journal reported. German car maker giant Volkswagen AG
They advised their brands to pause ads on Twitter to review the company’s updates to its brand safety guidelines.
Mr. Musk’s tweet after tweet to employees Thursday said employees would be notified by 9 a.m. Friday if they lost their jobs or were still employed, the Journal reported.
Twitter began notifying employees of the layoffs early Friday, according to documents seen by the Journal.
About 50% of Twitter workers were affected by the layoffs, according to an email sent overnight to one of the victims in the United States seen by the Journal. It is not clear what departments the terminated employees worked in.
Earlier this year, Twitter said it had more than 7,500 employees.
The layoffs are intended to “put Twitter on a healthy path,” according to the company’s Thursday email. “We understand this will impact many individuals who have made significant contributions to Twitter, but this move is unfortunately necessary to ensure the company’s success moving forward,” the company added.
In the e-mails about the layoffs, Twitter said employees assigned to “non-working” status will continue to receive compensation and benefits until their separation date, which was set for one in early February and the other in early January. Besides instructing them to return company assets such as laptops, approximately one month’s base pay will be expected after 45 days from the date of termination.
Twitter did not say whether employees expected to receive year-end bonuses, which historically depend on individual and company performance. The company has not disclosed whether employees will receive equity payments when they are not working.
Some employees reported losing access to Twitter communication tools overnight. An e-mail sent to an employee in Canada and viewed in a journal by the service of terminating the company’s systems does not mean that the person has been terminated.
The dismissal comes as a major upheaval among Twitter employees, which began in April when the company declared Mr. Musk its largest individual shareholder. Mr. Musk agreed to join Twitter’s board before deciding not to. Twitter finally bids for the company it acquired. In the weeks since, Mr. Musk has raised questions about the deal, then tried to abandon it, saying last month that he would change course again and continue with the transaction. Along the way, he sometimes criticized the organization and its managers.
Thursday’s email said Twitter’s offices will be temporarily closed to protect the safety of employees, company systems and customers. Employees who were in the office or on their way to one were asked to go home, according to the email.
Twitter employees have been bracing for layoffs. The Journal previously reported that the company was planning extensive layoffs, with one investor saying up to 50% of the workforce could be cut, and that employees would be assessed to determine the extent of burnout.
There have been signs of Twitter pushing back after the firing. In a federal lawsuit filed Thursday, a handful of Twitter employees allege the company violated federal and California law by failing to provide adequate notice of the mass layoffs.
In California federal court, five former Twitter employees who were terminated this week allege the company’s layoffs violate the federal Employee Adjustment and Retraining Notice Act and California’s equivalent, which requires 60 days’ written notice. Firing multiple employees at once. The suit asks the court to grant an injunction restraining Twitter from allegedly committing the act. Twitter did not immediately respond to a request for comment.
In April, when Mr. Musk moved to buy Twitter, close partner Jason Calakanis proposed cutting Twitter’s workforce by roughly 3,000, according to messages between the two that were released as part of the dispute over the transaction.
The 3,000 employees represents the lowest level since Twitter went public in 2013, when the platform had about 2,700 employees and revenue was up about 13 percent from last year.
Twitter’s headcount began to climb in 2019 after hovering around 3,000 to 4,000 for several years. Twitter attributes its growth in recent years to investments in engineering, production, design and research.
Even before Mr. Musk officially took control of Twitter, he indicated that he was concerned about the company’s costs. Twitter has posted losses in eight of the last 10 fiscal years, according to FactSet.
Mr. Musk has moved quickly to make personnel changes at the top of the company. On the day it closed the deal last week, Twitter fired CEO Parag Agrawal and three other top executives. Mr. Musk fired the executives for cause and said he would not be forced to pay them multimillion-dollar severance packages, the Journal reported. Other executives have since been fired.
Mr. Musk has tried to put his stamp on other parts of his business empire on Twitter. It brought in some Tesla engineers to start working on redesigning the social media platform, the Journal reported. Mr. Musk worked for The Boring Co., which is the parent company of Boeing.
More broadly, the social media industry is struggling with weak revenue for digital advertisers. Such advertising has declined for a variety of reasons, including rising inflation, the war in Ukraine, and Apple’s privacy changes that have made it difficult to track ads’ performance. This year, Twitter rival Snap Inc. He said he was laying off 20% of the workforce. Facebook parent Meta Platforms Inc. He also pointed out that the standards are getting worse.
Beyond social media, tech companies are also starting to tighten their belts, leading to layoffs and job losses. On Thursday, the ride-hailing company Lyft Inc.
and payments company Stripe Inc. Announced major layoffs, and Amazon.com Inc.
He said he would freeze corporate hiring for months.
Write Sarah E. Needleman at [email protected] and Alexa Corse at [email protected]
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