Twitter Roiled by Layoff Talk as Deadline for Musk Deal Looms

Employees at Twitter are reeling following revelations that the workforce may face massive cuts in the year ahead regardless of who owns the company. According to documents obtained by The Washington Post, Twitter’s current management plans to trim the payroll by about $800 million, representing nearly 25 percent of the company’s staff. However, Twitter denies that report. Meanwhile, Elon Musk, who is being sued to force consummation of his $44 billion Twitter purchase, is said to be contemplating elimination of three times as many jobs.

A Delaware Chancery Court judge has set a deadline of October 28 for the acquisition to close. The Washington Post says “Musk told prospective investors in his deal to buy the company that he planned to get rid of nearly 75 percent of Twitter’s 7,500 workers, whittling the company down to a skeleton staff of just over 2,000,” a move that is “likely to have major impact on its ability to control harmful content and prevent data security crises.”

Describing Musk’s $44 billion bid as “a golden ticket for the struggling company,” WaPo says that in addition to its alleged plan to shrink the workforce, Twitter management has also developed a blueprint for infrastructure cuts, including at “data centers that keep the site functioning for more than 200 million users that log on each day” as a means of staunching red ink.

In its Q2 earnings release, Twitter said it had an operating loss of $344 million for the quarter. Twitter’s Q3 earnings report would normally issue this week, although the company has yet to announce a date.

But WaPo wrote that “even if Musk’s Twitter deal falls through — and there’s little indication now that it will — big cuts are expected.” The Thursday WaPo article prompted Twitter general counsel Sean Edgett to email employees that same day, clarifying that “the company does not plan layoffs, according to a source who viewed the email,” Reuters wrote later on Thursday.

“Human resources staff at the social media company have told employees that they were not planning for mass layoffs, but documents showed extensive plans to push out staff and cut down on infrastructure costs were already in place before Musk offered to buy the company,” the Reuters article states, commenting on the WaPo reporting.

With Musk’s “takeover back on track and set to close no later than next Friday, disquiet inside the company has intensified,” writes The New York Times, noting that against the vertiginous backdrop of the looming deal, “the company is trying to reassure workers about their employment and compensation.”

The impact of deep staffing cuts “would likely be immediately felt by millions of users, said Edwin Chen, a data scientist formerly in charge of Twitter’s spam and health metrics and now CEO of the content-moderation startup Surge AI,” writes WaPo, noting that while Chen said he believed Twitter to be overstaffed, he described the cuts Musk is contemplating as “unimaginable,” and says they would render Twitter users vulnerable to things like hacks and exposure to inappropriate content.

Business Insider writes that the federal government “is considering a national security review” of Musk’s deal. “If it happens, President Biden could ultimately kill the deal,” Insider reports.

Twitter Is Already Under Pressure as Musk Closes In, Axios, 10/24/22
Potential Mass Layoffs at Twitter Could Cripple Content Moderation, ABC News, 10/22/22
Elon Musk’s Twitter Takeover Seen Swelling the Company’s Debt, The Wall Street Journal, 10/24/22

No Comments Yet

You can be the first to comment!

Sorry, comments for this entry are closed at this time.