In a bid to cut costs following $44-billion Twitter acquisition, Tesla CEO Elon Musk plans to eliminate 3,700 jobs or half of the social media company’s workforce, citing sources privy to the development Bloomberg reported on Thursday.
The new owner of Twitter may inform affected employees on Friday, said the sources. The world’s richest person also intends to reverse the company’s existing work-from-anywhere policy, asking remaining employees to report to offices, though some exceptions could be made, the sources pointed out.
According to the report, Musk and his team of advisors have been weighing a range of scenarios for job cuts and other policy changes at San Francisco-based Twitter, the sources said, adding that the terms of the headcount reduction could still change. In one scenario being considered, laid off workers will be offered 60 days’ worth of severance pay, two sources have told Bloomberg.
Musk is under pressure to find ways to slash costs of a business for which he says he overpaid. The billionaire agreed to pay $54.20 a share in April just as markets tumbled. He then tried for months to get out of the transaction, alleging that the company misled him about the prevalence of fake accounts. Twitter sued to force Musk to make good on his agreement, and in recent weeks, Musk caved, resigning himself to closing the deal at the agreed-upon terms. The take-private deal closed on Thursday.
Twitter employees have been bracing for layoffs ever since Musk took over and immediately ousted much of the top executive team, including Chief Executive Officer Parag Agrawal, Finance chief Ned Segal, and enior legal staffers Vijaya Gadde and Sean Edgett.
In the days that followed, other departures have included Chief Marketing Officer Leslie Berland, Chief Customer Officer Sarah Personette, and Jean-Philippe Maheu, who was vice-president of global client solutions.
Musk anointed himself “Chief Twit” in his bio on the social network. He also dissolved the company’s board and became sole director, saying later that it’s “just temporary.”
Other leaders were asked to make lists of employees on their teams who could be cut, according to sources.
Senior personnel on the product teams were asked to target a 50 per cent reduction in headcount. Engineers and director-level staff from Tesla Inc. reviewed the lists, the person said.
Layoff lists were drawn up and ranked based on individuals’ contributions to Twitter’s code during their time at the company, the people said. The assessment was made by both Tesla personnel and Twitter managers.
Concerns over steep personnel cuts started to swirl in the run-up to Musk’s buyout, when potential investors were told that he’d eliminate 75 per cent of the workforce, which stood at about 7,500 at the end of 2021. Musk later denied that the cuts would be that deep.
Last month, Musk started hinting at his staffing priorities, saying he wants to focus on the core product. “Software engineering, server operations, and design will rule the roost,” he tweeted in early October.