Musk reportedly wants to gut Twitter workforce by up to 75%
Twitter tells staff it knows of no plans, though. Plus: billionaire's ventures could take heat from Committee on Foreign Investment
Elon Musk has reportedly told investors in his Twitter buyout that he will gut the workforce by as much as 75 percent once his court-ordered takeover concludes.
However, Twitter told staff there have been no plans for company-wide layoffs ever since the mogul signed the merger agreement.
According to documents obtained by The Washington Post, Musk told prospective investors in the deal that he aimed to slash Twitter's 7,500 staff down to 2,000.
The newspaper claims that cuts are on the horizon whether or not Musk's takeover goes ahead. Citing corporate documents and "people familiar" with the matter, management wants to reduce payroll by $800 million, or nearly a quarter of the workforce.
Twitter is also considering reducing its infrastructure overheads, "including datacenters that keep the site functioning for more than 200 million users that log on each day."
Twitter General Counsel Sean Edgett warned workers to expect "tons of public rumors and speculation" as the October 28 deadline for the deal draws near in an internal memo.
"We do not have any confirmation of the buyer's plans following close and recommend not following rumors or leaked documents but rather wait for facts from us and the buyer directly," he added.
Bloomberg verified that investors were told of the planned cuts – as well as the target of doubling revenues within three years on the back of a skeleton crew.
"Since the merger agreement has been in place, there have been no plans for any company-wide layoffs," Edgett said.
And of course, all of this should fill Twitter employees with confidence.
WaPo spoke to a former Twitter data scientist, Edwin Chen, about the effects of the proposed cuts and was told that Twitter would be less able to keep accounts secure and moderate illegal material.
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"It would be a cascading effect where you'd have services going down and the people remaining not having the institutional knowledge to get them back up, and being completely demoralized and wanting to leave themselves."
Meanwhile, Bloomberg reports that the Biden administration is considering subjecting Musk ventures – including the Twitter takeover – to national security reviews on grounds of the billionaire's apparent softening stance toward Russia.
First, he proposed terms for peace favorable to Putin between Russia and Ukraine based on UN-supervised votes in annexed regions, Crimea officially given to Russia, and Ukraine's assured neutrality. Then he moaned that his decision to supply Starlink to Ukraine had lost the company over $80 million, and asked the Pentagon to start picking up the tab.
Then he threw his toys out of the pram, huffing: "The hell with it … even though Starlink is still losing money & other companies are getting billions of taxpayer $, we'll just keep funding Ukraine govt for free."
Bloomberg's sources say Uncle Sam could possibly scrutinize Musk's dealings through the Committee on Foreign Investment in the United States (CFIUS), which reviews acquisitions of American companies by foreign buyers.
Musk's Twitter consortium includes Prince Alwaleed bin Talal of Saudi Arabia, Binance Holdings Ltd, which is run by a Chinese native, and Qatar's sovereign wealth fund. ®