Twitter losing $4M per day; workforce reduced by half
Just a week after its takeoff by billionaire Elon Musk, Twitter has fired roughly half of its 7,500-strong workforce worldwide. The move is part of Musk's plans to recoup the mammoth $44 billion he spent on acquiring the popular microblogging platform. The laid-off workers have been denied access to emails, company computers, and internal communication systems, such as Slack, on an immediate basis.
Laid-off employees have expressed their disappointment
Twitter's former director of public policy for the US and Canada, Michele Austin, said, "Woke up to the news that my time at Twitter has come to an end. I am heartbroken. I am in denial." Meanwhile, another ex-employee, on condition of anonymity, described the company's new move as a "mercenary effort" and an "inhumane way to treat people."
Almost the entire Indian team has been fired
Twitter's third-largest market, India, has also been scorched by downsizing. The division, which used to have 230-250 employees, is now down to less than 10. The team which curates content for Twitter Moments has been relieved, while communications, sales and ad revenue, and global content partnerships have lost the majority of their workforce. Laid-off workers are tipped to get two months of severance pay.
What's the financial angle behind the layoffs?
The Twitter deal cost Musk $44 billion. To finance this agreement, he borrowed billions of dollars from various institutions. He also sold Tesla shares worth $15.5 billion for the same. The microblogging platform is also hemorrhaging money, with a loss of over $4 million per day. Add to this the potential loss of advertising revenue, and you get a recipe for disaster.
How does the company plan to generate revenue?
Ever since Musk took over Twitter, several brands have started putting advertisement buys on hold as they distrust his commitment to content moderation. The SpaceX top boss has also failed to pacify civil rights groups, who believe that Twitter is devolving into a safe haven for hate speech and conspiracy theories. In such a scenario, Musk plans to charge $8/month for account verification.
Thousands of users are jumping ship
Despite its popularity among opinion makers, Twitter is getting left behind rivals like Instagram and Facebook when it comes to gaining new users. In fact, it is losing users. Ever since Musk acquired Twitter, over 875,000 accounts were deactivated, while thousands more were suspended. This is indeed a cause of worry for the company that has struggled to generate revenue over the years.