Elon Musk mulling mass layoffs at Twitter: Reports

Elon Musk planned to begin laying off workers at Twitter as soon as Saturday last week, four people with knowledge of the matter said, with some managers being asked to draw up lists of employees to cut. The billionaire responded by labelling these allegations as false.

Musk also appears unlikely to pay the golden parachutes that the fired top executives of Twitter were set to receive.
Musk also appears unlikely to pay the golden parachutes that the fired top executives of Twitter were set to receive. Photo courtesy: Twitter/@elonmusk

Musk, who completed a USD 44 billion deal to buy Twitter, has ordered the cuts across the company, with some teams to be trimmed more than others, said three of the people, who declined to be identified for fear of retaliation. The scale of the layoffs could not be determined. Twitter has about 7,500 employees.

Reports of layoffs at Twitter have swirled since Musk agreed to buy the company in April. The billionaire, who also leads electric carmaker Tesla and rocket company SpaceX, has told investors that he would take Twitter private, reduce its workforce, roll back its content moderation rules and find new revenue streams.

The layoffs at Twitter would take place soon, when employees were scheduled to receive stock grants as part of their compensation. Such grants typically represent a significant portion of employees’ pay. By laying off workers before that date, November 1, Musk may avoid paying the grants, although he is supposed to pay the employees cash in place of their stock under the terms of the merger agreement.

Refuting the report, Musk in a post on Twitter said that the claim is false. "This is false", Musk tweeted in a response to a Twitter user asking about the job cuts.

Ross Gerber, the CEO of Gerber Kawasaki Wealth and Investment Management, said he was told by Jared Birchall, the head of Musk’s family office, that layoffs were coming at Twitter. “I was told to expect somewhere around 50% of people will be laid off,” he said.

Gerber said his firm had invested less than USDD 1 million to help finance Musk’s Twitter acquisition. Birchall did not respond to an email for comment.

Musk, 51, has moved swiftly since assuming ownership of Twitter. He arrived at the company’s San Francisco headquarters and began meeting employees. He fired Twitter’s CEO, chief financial officer and other executives. He has also made an appeal to advertisers, who provide the bulk of Twitter’s revenue, to tell them that the platform will be a respected advertising destination.

But Musk is taking time to evaluate other areas of Twitter, such as deciding what posts to keep up and take down on the site. Although he initially said he wanted Twitter to be a freewheeling place for all kinds of commentary and would bring back banned users, including former President Donald Trump, Musk made it clear that such changes would not happen immediately. Instead, he announced that he planned to form a council to handle content questions and would not immediately reinstate users who had been barred.

Musk also appears unlikely to pay the golden parachutes that the fired top executives of Twitter were set to receive. Under the merger agreement, those executives — including Parag Agrawal, the CEO — had been set to receive compensation of USD 20 million to USD 60 million if they were fired. But Musk terminated the executives “for cause,” meaning he did it with justification, which may void that agreement, two people with knowledge of the matter said.

Those executives, who also include former chief financial officer Ned Segal, former general counsel Sean Edgett, and former top policy and legal executive Vijaya Gadde, are deliberating their next steps, one person said.

Musk may also be testing Twitter’s engineers. He and his team have assigned some of them projects to complete, three people with knowledge of the matter said. One project involved changes to Twitter’s login screen, they said. Some engineers worked late into the night Friday to complete the assignments, they said.

On Twitter, some users who accused the platform of muzzling them have been triumphant about the new ownership, while others have worried that the site will be overrun by hate speech and misinformation. Some users — such as star producer Shonda Rhimes, 'This Is Us' executive producer Ken Olin and 'Billions' showrunner Brian Koppelman — tweeted that they would leave the social media platform now that it was run by Musk.

CtoI News Desk
CtoI News Desk – CtoI

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