Twitter is headed for mass layoffs if billionaire Elon Musk’s drama-plagued takeover of the company goes through, according to a new report.
Musk has told prospective investors he plans to cut nearly 75% of the company’s 7,500-strong workforce, according to The Washington Post. After months of back-and-forth and a nasty legal fight, the takeover deal is expected to close by the end of the month.
Even if the acquisition doesn’t close, Twitter’s current management had already made plans prior to Musk’s takeover bid to shave some $800 million from the payroll, which would correspond to around a quarter of the company’s head count. Some of the planned layoffs are paused pending the company’s sale to Musk, The Post reported.
Twitter has been located in San Francisco since its founding in 2006 and moved its headquarters to the mid-Market neighborhood in 2011. However, the roughly 2,000 “Tweeps” who once worked at Twitter’s headquarters complex have largely vanished since the company offered permanent remote work in May 2020.
Experts told The Post that the cuts would have major ramifications on the social network’s cybersecurity efforts in addition to its ability to handle misinformation, hate speech and offensive material.
Twitter is in the midst of instituting a ranking system for its employees meant to help identify low performers at the company, which could aid Musk in his cost-cutting efforts, The Post reported.
In a town hall with Twitter employees held earlier this year, Musk addressed the potential of layoffs. He said the company “needs to get healthy” and “anyone who is a significant contributor should have nothing to worry about.”
According to The Post’s reporting, Musk has told investors that his plans to boost profits at Twitter would be aided by job cuts combined with new employees intended to expand subscription revenue.
Musk has been able to sign on major partners like Oracle cofounder Larry Ellison, Sequoia partner Doug Leone and financier Kenneth Griffin to help fund the deal. However, Peter Thiel’s Founders Fund, LinkedIn’s Reid Hoffman and private equity billionaire Orlando Bravo have turned him down.
During a Tesla earnings call on Wednesday, Musk said he was “obviously overpaying” for the company, but said that “the long-term potential for Twitter, in my view, is, in order of magnitude, greater than its current value.”