Elon Musk already has his blacklist. The tycoon has asked those in charge of the various Twitter departments to identify the most valuable people and those that he could do without by default. With this information, the company’s new owner is finalizing plans for aggressive downsizing. The Bloomberg agency and media outlet Insider said on Wednesday evening (early Thursday morning in Spain) that Musk plans to lay off 3,700 employees, almost half of the company’s 7,500 employees.
The cut doesn’t reach the 75% he achieved in meetings with an investor and later denied on a visit to Twitter, but nothing guarantees this is the end of the road. On the other hand, hundreds of employees have already left the company in recent months with the prospect of Musk becoming their new boss.
The billionaire and his team intend to notify affected employees on Friday, according to the Bloomberg sources, who asked not to be identified. With Musk’s fickle nature, nothing is guaranteed until it happens, and the number could vary. Multiple sources have told US media that he was planning to start the layoffs last week and, apart from a few specific cases, they then didn’t happen.
Goodbye telecommuting
Musk also intends to reverse the currently widespread telecommuting policy, which allows employees to do their jobs from anywhere, and will introduce face-to-face offices, although some exceptions could be made. The employer has never been a proponent of teleworking. At Tesla, he sent a message to employees warning them to spend at least 40 hours a week in the office. Only when these hours are completed does the employer allow employees to work remotely. “If you don’t show up, we’ll assume you’ve resigned,” he wrote.
By downsizing, Musk is attempting to lower costs for the company, which has typically been in the red and not generating enough cash to pay interest on the hefty $13,000 million in debt the company is raising itself as part of the financing took over the operation with which the tycoon and his partners bought the social network for around 44,000 million euros.
The company also faces a possible loss of advertising revenue. General Motors has announced that it will suspend its advertising on the network, L’Oréal has made the same decision, according to the Financial Times, and many others are waiting for the possible exodus of the network, where racist, sexist and homophobic messages are contained, to explode once the purchase is completed is before the content moderation policy was changed.
Musk has said those whose accounts are suspended will not be able to return to the network for a few weeks after the November 8 general election in the United States. The new owner has announced that it will entrust an expert council with the new content moderation policy, but neither its composition nor the deadline it must have to complete its work have been disclosed.
In addition, Musk wants to increase subscriber revenue and has announced that it will set a monthly fee of $8 for the blue tick, among other benefits. That provoked some reactions. One of the first to criticize the collection plans was writer Stephen King: “You should pay me,” he said. Now, Elon Musk has pinned a response to Democratic Congresswoman Alexandria Ocasio-Cortez on his profile: “It kicks my ass to see a billionaire trying to sell people the idea that ‘freedom of speech’ actually exists plan is. $8 per month subscription fee,” the policy wrote. “Your comments are appreciated, pay $8 now” replied Musk.
Your feedback is appreciated, pay $8 now
— Elon Musk (@elonmusk) November 2, 2022
When Musk took control of the company last Thursday, he fired much of the management team, including CEO Parag Agrawal, CFO Ned Segal, chief legal officer and content moderator Vijaya Gadde, and council secretary Sean Edgett. There were more departures in the days that followed, including Marketing Director Leslie Berland, Client Director Sarah Personette, and Jean-Philippe Maheu, Vice President of Global Client Solutions.
In the operation’s brochure, it appeared that Agrawal had a shield, or “golden parachutes,” as the document called it, of just over $60 million. In addition, Segal is said to have been armored at $46.4 million; Gadde with 21 million and Personette with another 20 million. There may have been some other armored managers. Musk will likely try to avoid paying those amounts by demanding fair layoffs, so the matter could end up in court.
There is no way that the vast majority of employees who are laid off will receive such generous compensation. In one of the scenarios studied, workers would be offered 60 days’ wages, according to sources cited by Bloomberg.