‘Economic picture ahead is dire,’ Elon Musk tells Twitter employees
SAN FRANCISCO – Two weeks after closing a $44 billion deal to buy Twitter, Elon Musk painted a bleak financial picture for the social media company and outlined a series of changes for employees in his first companywide emails to staff.
In two emails sent to workers late Wednesday, Musk said the economy was challenging. He added that he was ending Twitter’s remote work policy and wanted employees to renew their focus on generating revenue and fighting spam.
“Sorry that this is my first email to the company, but there is no way to sugarcoat the message,” Musk, 51, wrote in one email. “The economic picture ahead is dire.” Twitter is too heavily dependent on advertising and vulnerable to pullbacks in brand spending, he added, and will need to bolster the revenue it gets from subscriptions.
In another note to employees, he wrote that “the absolute top priority is finding and suspending any verified bots/trolls/spam.”
Musk’s emails added to the changes that are roiling Twitter. Last week, he cut about 50% of the company’s 7,500 employees, and he has been pushing for product changes that would help Twitter make more money, including promoting a subscription product. He previously said the company was losing $4 million a day.
Twitter, whose communication department has been laid off, did not respond to a request for comment. Bloomberg earlier reported Musk’s emails.
On Wednesday, three top Twitter executives responsible for security, privacy and compliance also resigned, according to two people familiar with the matter and internal documents seen by the New York Times.
The departing executives were Lea Kissner, the chief information security officer; Damien Kieran, the chief privacy officer; and Marianne Fogarty, the chief compliance officer. They resigned a day before a deadline for Twitter to submit a compliance report to the Federal Trade Commission, which is overseeing privacy practices at the company as part of a 2011 settlement.
Twitter has typically reviewed its products for privacy problems before rolling them out to users, to avoid additional fines from the FTC and remain in compliance with the settlement. But because of a rapid pace of product development under Musk, engineers could be forced to “self-certify” so that their projects meet privacy requirements, one employee wrote in an internal message seen by the Times.
“Elon has shown that he cares only about recouping the losses he’s incurring as a result of failing to get out of his binding obligation to buy Twitter,” the employee wrote. The changes to Twitter’s FTC reviews could result in heavy fines and put people working for the company at risk, the person warned.
“This will put huge amount of personal, professional and legal risk onto engineers: I anticipate that all of you will be pressured by management into pushing out changes that will likely lead to major incidents,” the employee wrote.
“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, a spokesperson for the FTC, said in a statement. “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.”
Twitter faces pressure to earn money. To fund the buyout, Musk took out $13 billion in debt, which will require Twitter to pay more than $1 billion annually in interest alone.
The company earns about 90% of its revenue from advertisers, some of whom have shied away from the platform in recent days because of uncertainties over Musk’s commitment to removing toxic content from Twitter. He has responded by threatening a “thermonuclear name & shame” of advertisers who choose to halt their spending.
Musk has also raced to find new subscription revenue. One of his first projects was to revamp a subscription service, Twitter Blue. He raised the price to $8 a month and said subscribers would receive a verification check mark, which Twitter has typically given to prominent users such as celebrities and politicians.
In one of his emails to staff Wednesday, Musk said that subscriptions should eventually account for about half of the company’s revenue. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” he wrote.
Musk also told employees that they must return to the office Thursday and work from there for a minimum of 40 hours a week. Twitter’s workforce has been remote since early in the pandemic, and in recent years, its employees have been allowed to choose where they want to live rather than remaining in cities where the company has offices.
At some of Musk’s other companies, including the electric carmaker Tesla and the rocket-maker SpaceX, he has also said employees must go into the office to work 40 hours a week.