Inside Elon Musk’s Cost-Cutting Drive at Twitter

Musk montage, Twitter logo

Montage FT/Getty Images/Bloomberg

From a secret “war room” at Twitter’s San Francisco headquarters last month, trusted aides to Elon Musk pored over a list of employees, showing the cost of the social media company.

Then the billionaire owner’s “transition team”, headed by Steve Davis, who leads Musk’s Boring Company, began to call the staff. Some were asked to justify their role; Others should recommend colleagues to keep.

And those deliberations have informed Musk’s recent layoffs at Twitter, as part of his efforts to bring the money-losing company to financial health while also battling an advertiser exodus and an impractical debt-service bill.

The cuts in February removed more than 200 employees but were still broader and deeper than many employees had expected, because they came after Musk had already laid off half of the company’s workforce of 7,500 following his acquisition of Twitter in October. The move wiped out large segments of the business and product development teams, and left Twitter leaner — and more unstable.

This account of the billionaire’s ongoing efforts to control Twitter’s finances with his inner circle is based on interviews with current and former Twitter employees, people familiar with Musk’s thinking, his Twitter public statements and investors.

Musk, Twitter and most of the transition team did not respond to a request for comment.

The transition team, formed in November, has often refused immediate payments to many Twitter sellers, landlords and partners in hopes of cutting costs, in some cases angering customers and leading to half-hearted stand-offs.

The payment comes as Twitter is expected to roll out new compensation packages to employees in late March, two people familiar with the situation said. For tax purposes, Twitter is in the process of calculating a new valuation of the company’s common stock pricing, which determines the value of employee stock options, the people said. Someone said the valuation is probably well below the $44 billion acquisition price.

At an investor conference hosted by Morgan Stanley last week, Musk said he had cut non-debt expenses to $1.5 billion, from the $4.5 billion he claimed he would have incurred in 2023, adding that Twitter could reach cash flow positive by the second. a fourth.

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