Some people think he’s a genius, while others think he’s a maniac, yet he’s in charge of the future of one of the Bay Area’s most significant (and loss-making) enterprises. Thousands of employees were fired on the spot on Friday, and advertisers are cautious of what new owner Elon Musk has in store for the social media giant.
I mean, what is he going to do? Steve Blank, a guru in the Silicon Valley tech industry and an adjunct professor in the departments of management science and engineering at Stanford University, said, “No one knows.”
Twitter is now $13 billion in debt after Musk’s leveraged takeover and privatisation of the firm for $44 billion last month. Twitter, which has been losing money for eight of the past ten years, reportedly started a big layoff on Friday that might affect as many as 3,700 employees, or over half of the San Francisco-based firm’s global staff.
In a tweet sent on Friday afternoon, Musk announced the layoffs, writing, “sadly there is no choice.” The company was losing more than $4 million every day. According to Twitter’s most recent quarterly regulatory filing, the company is losing about $3 million every day.
A lot of people are worried about the future of the platform and the firm because of the layoffs, Musk’s intention to charge users $8 per month for verification, and his previous statements about letting anyone to tweet anything as long as it’s legal.
Amidst numerous layoffs at the region’s tech firms, the Bay Area Council labelled Friday’s layoffs “troubling,” although they characterised Musk’s action as “an internal business decision.” According to Musk, those who were let go were offered three months’ worth of severance.
Business-backed policy and advocacy group Silicon Valley Leadership Group lamented, “sad day for so many really smart folks at Twitter.” But it didn’t take a stand on whether or not Musk’s leadership should be supported in the company’s current transformation. “Disruption has always been a feature of the Silicon Valley economy, which carries with it highs and lows,” the CEO of the company, Ahmad Thomas, stated.
Blank said Musk was “the world’s most anti-social person” despite his achievements as CEO of world-leading businesses Tesla and SpaceX in Southern California.
Blank claimed that Twitter required a “re-invention” since it had become “bloated” and “unmanageable.” He has a proven track record of recognising opportunities that others overlooked.
Musk has a net worth of $190 billion, according to Bloomberg, and is revered by a devoted following of followers who applaud his boldness and creativity. Many people strongly disapprove of his right-wing beliefs and disregard for established conventions, which fuels their hatred of him. Twitter, a platform used by hundreds of millions throughout the world, including everyday people, celebrities, and government officials, was just purchased by him, and he has become the centre of attention due to his money and fame.
Blank warned that if Musk controls Twitter primarily to maximise revenues, the platform might become toxic to users and advertisers, leading to a loss of users for Twitter. Past tweets from Musk’s account have included an Adolf Hitler meme and a sexist acronym, and one from this past weekend promoted a fabricated account by a notorious publisher of false news about the attack on House Speaker Nancy Pelosi’s husband, Paul. These actions have raised concerns about such toxicity.
In order to pay off the billions of dollars in debt he incurred when he first took over Twitter and the company’s history of losses, Musk has unveiled a proposal to charge users $8 per month for the “blue-check” verification the platform has employed to authenticate apparently credible information sources.
Concerns that Twitter will devolve into a morass of disinformation where abusers and purveyors of propaganda have free reign were amplified by the plan, even among the advertisers who will be significant sources of revenue for Twitter. Users have benefitted in the past from verification’s ability to tell authentic from fraudulent data, but if it’s only used for paying users, that distinction may evaporate.
Musk tweeted on Friday that he believes “activist groups pressuring advertisers” are to blame for the company’s “huge reduction” in advertising revenue. A minority of businesses, though, have been paying careful attention to what Twitter’s new owner has been saying, and have adjusted their advertising budgets as a result.
In response to criticism of its Twitter ads, outdoor retailer REI declared on Friday that it is “dedicated to creating a truly inclusive, anti-racist, multicultural business.” REI has nine locations in the Bay Area. In order to get “more information on the future of the platform,” the company has temporarily halted advertising spending and promotional tweets on Twitter due to “the unclear future of Twitter’s ability to moderate dangerous content and guarantee brand safety for advertisers.”
Volkswagen Group, the parent company of Volkswagen as well as Porsche, Audi, Lamborghini, and Bentley, stated on Friday that in light of Musk’s proposal to loosen content regulations, it has “advised to its brands to halt their paid activity on the platform until further notice.” The business is “closely watching the situation and (will) decide about next steps depending on its evolution,” according to VW spokesman Jens Katemann.
By late Friday afternoon, Musk had responded to right-wing pundit Mike Davis’s tweet in which Davis urged Musk to “name and shame the advertisers who are succumbing to the advertiser boycotts” so that they could be subjected to a “counter-boycott,” writing, “A thermonuclear name & shame is exactly what will happen if this continues.”