Elon Musk warns Twitter staff of bankruptcy as chaos deepens
In his first all-hands with Twitter employees, Elon Musk painted a bleak picture of the company's future. During the meeting, Musk raised the possibility of the company going bankrupt. The meeting capped off a tumultuous day for Twitter where more senior executives resigned. It was also warned by the Federal Trade Commission. Musk warned employees of tough days ahead in an email sent earlier.
Why does this story matter?
- First an email and then an all-hands, Musk has been busy getting in touch with his new group of employees. This is the first time the new CEO talked to Twitter employees directly.
- The chaos and uncertainty that began after Musk's takeover are yet to settle. His warning about a possible bleak future will only add to the uncertainty surrounding Twitter.
Musk wants Twitter's net cash flow to be positive
During the all-hands with employees, Musk said that "bankruptcy is not out of the question." According to him, the company needs to bring in more cash than what is spent. Bankruptcy can be stopped only with a positive cash flow, said Musk. In an email written to employees, Musk had warned employees about the possible impact of the current economic outlook on Twitter.
Company's privacy and compliance executives have resigned
Things are chaotic at Twitter at the moment. Amid Musk's warning to employees about a possible bankruptcy situation, a few senior executives of the company have resigned. According to Bloomberg, Yoel Roth, the company's head of trust and safety, Lea Kissner, the chief security officer, chief privacy officer Damien Kieran, and chief compliance officer Marianne Fogarty are the executives who have resigned.
Robin Wheeler has not resigned
Bloomberg had also reported that Robin Wheeler, who moderated Musk's Twitter Spaces chat with advertisers, was among those who resigned. However, she later tweeted, "I'm still here." According to Bloomberg's Kurt Wagner, she decided to stay only after Musk convinced her to do so.
FTC is watching Twitter with 'deep concern'
The resignation of senior privacy and compliance officers has attracted some unwanted attention. The US FTC said that it is watching Twitter with "deep concern." "No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them," said an FTC spokesperson.
Twitter has to do privacy review before making any change
Twitter's FTC content order mandates the company to do privacy reviews before making changes to the product. In 2011, the company had agreed to a 20-year FTC consent order. Alex Spiro, Musk's lawyer, told employees that Twitter will comply with FTC's consent orders. He added that only the company and not employees would be liable for any non-compliance.
