Musk warned employees of “tough times ahead” in an email sent late on Wednesday. Adding that there was “no way to sugarcoat the news” about the company’s economic future. He prohibited remote work for his staff members unless he approved it.
Elon Musk said that bankruptcy would be an option for Twitter (TWTR:NYE), according to sources. In his first speech to the company’s employees after buying it for $44 billion. He said that if the company doesn’t generate money then he will file for bankruptcy.
Elon Musk Actions
The warning occurred amid a turbulent beginning to Elon Musk’s leadership. In a span of two weeks he:
dismissed half of Twitter’s personnel,
ousted the majority of the senior executives,
and ordered the remaining staff to stop working from home.
Effects of Elon Musk Actions
Yoel Roth, one of the executives of Musk’s new leadership, left according to sources. Robin Wheeler resigned but Musk persuaded her to stay, according to anonymous sources. They remained anonymous to safeguard their personal and professional lives.
Twitter Financial Woes
The acquisition has shielded Twitter from public market scrutiny. Elon Musk saddled the firm with over $13 billion in debt. Seven Wall Street banks hold Twitter.
Investor confidence in the company has plummeted. Some funds were offering to buy the loans for as little as 60 cents on the dollar. The price set for Twitter is now considered to be in financial distress. This was even before Elon Musk bankruptcy comments.
Elon Musk New Work Place Policies
Elon Musk repeated several sombre cautions in his speech to the workers:
- Expect 80-hour work weeks.
- There won’t be as many workplace benefits, including free lunch.
- He also put an end to the flexibility that permitted workers to work from home during the pandemic.
According to a person acquainted with the situation, he added,
“If you don’t want to come, resignation accepted.”
About the possibility of attrition, Musk responded, “We all need to be more hardcore.”
Twitter New Direction and Feedback
Advertisers who worried about bad content and gave pushback to Twitter. Elon Musk said that the $8 subscription, Twitter Blue, should be something people will want to pay for. He was speaking about Twitter’s finances and future.
Elon Musk Managerial Style
A person acquainted with Musk’s managerial style made a claim about his tactic. Elon Musk uses the threat of financial disaster to encourage staff. So, he is trying to make the point that if people don’t put in a lot of effort, Twitter will be in a very precarious position.
Additionally, he made suggestions for goods he’d like to launch, such as:
interest-bearing checking accounts,
According to him, the Twitter app’s onboarding process ought to be easier than it is for TikTok.
Privacy and Security
The maintenance of the platforms’ privacy and security legalities has become a question. Some key personnel have left such as the:
A consent order between Twitter and the Federal Trade Commission got signed. It governs how the business manages user data, and penalties for infractions.
Wheeler, sales vice president, had assumed responsibility for managing relationships with uneasy advertisers. Roth had taken over all the social network’s Trust and Safety initiatives. She made a clue about her choice to remain in a tweet and a message on an internal Slack channel.
Elon Musk and Financial Woes
Many financial estimations of the interest has been making rounds. One estimation has caught the interest of many. Twitter’s interest expenses as a result of the debt it took on to finance Musk’s takeover will reach $1.2 billion.
Some advertisers have pulled back from the social network. Users worry about Elon Musk intentions for content policing.
Additionally lacking in confidence are debt investors and credit rating agencies. The company’s banks have been approaching asset managers and hedge funds. They are inquiring about their interest in purchasing a part of the company’s debt.
According to sources, the focus of the discussions has been on the loan. It is a $6.5B leveraged loan component of the financing. One of the people said that the banks had appeared unwilling to sell for any amount less than 70 cents on the dollar. Bloomberg projects that losses might reach billions of dollars even at that level.
Moody’s Investors Service lowered Twitter’s credit rating even further into the junk category. Twitter’s governance risk is very bad, according to Moody’s. This reflects the company’s anticipated aggressive financial policies and Elon Musk’s concentrated ownership.
Recent Twitter News
Musk cautioned employees of “tough times ahead” in an email sent late on Wednesday. Adding that there was “no way to sugarcoat the news” about the company’s economic future. He prohibited remote work for his staff members unless he approved it.