Elon Musk said Twitter had recovered financially after ad revenue fell 50 percent and made one of his first public disclosures about the state of the social media company since its acquisition last year.
At a conference hosted by Morgan Stanley in San Francisco on Tuesday, Mr. Musk, Twitter’s new owner, said he has taken drastic measures to improve the company’s financial health by cutting around $3 billion dollars cut. After the cuts, the company has a chance to be cash flow positive in the second quarter, he said.
In the interview, conducted by Michael Grimes, a Morgan Stanley banker who helped broker Mr Musk’s $44 billion acquisition of Twitter, the billionaire said the company would have gone bankrupt “in four months.” , if he hadn’t reduced his costs. Since completing his acquisition in late October, Mr. Musk has laid off or fired more than 3,750 employees, left vendors and landlords unpaid, and eliminated cloud computing costs and one of Twitter’s three main data centers.
“Without action, Twitter would have had $6 billion in costs and $3 billion in revenue,” Musk said. He added that previous forecasts put costs at $4.5 billion and sales at $4.5 billion. Twitter reported revenue of $5.1 billion in 2021 – up 37 percent over the previous 12 months – and reported financial results for the last full year.
However, Mr Musk appeared to take little responsibility for changing the company’s financial outlook. He says he owes $1.5 billion a year to service debt he incurred to complete the deal. The decline in ad sales, which accounted for about 90 percent of the company’s revenue in previous years, came amid a pullback from advertisers as brands worried about rising hate speech and misinformation.
On Elon Musk’s Twitter
- downsizing: Twitter is said to have laid off at least 200 other workers. The social media platform now has fewer than 2,000 employees, down from 7,500 when Elon Musk took over.
- Failures increase: Musk’s repeated job cuts are fueling new fears that there aren’t enough people to investigate Twitter’s increasingly frequent outages, bugs and glitches.
- A tribute to Chinese activists: As Twitter encounters disconnects and errors, Chinese dissidents and activists said they feared they would be muzzled.
- Content of child abuse: After taking over Twitter, Mr. Musk pledged to rid the platform of child sexual abuse material. A review by The Times found that the images remained on the site.
He said the ad decline was part “cyclical” and part “political,” blaming the company’s depictions in the news media for advertisers’ fears.
“Believe what you see on Twitter, not what you see in newspapers,” Mr Musk said.
Mr. Musk’s appearance comes after Twitter addressed a series of outages and disruptions that have become more frequent under his ownership. On Monday, an error prevented many users from clicking links, loading images, or accessing certain parts of the site.
Mr Musk also spent part of Monday and Tuesday fighting with a former worker on Twitter. After Haraldur Thorleifsson, an employee in Iceland whose design company was acquired by Twitter, tweeted the billionaire to clarify whether he had been fired, Mr Musk accused him of using a disability as an “excuse” to not work, and claimed he was seeking “A big payoff.” (Mr Thorleifsson has muscular dystrophy and uses a wheelchair.)
While Mr Thorleifsson said on Twitter that he had finally received confirmation that he had been sacked, he is still awaiting word on whether he will be paid “what is owed to me under my contract”. Because his company was bought by Twitter, Mr Thorleifsson had higher pay than most employees and expected to be paid in full if fired.
“My company was acquired and as a result I was given a commitment to work at Twitter for a period of time,” Mr Thorleifsson said in an email to The New York Times. “I have fulfilled all aspects of my contract and now I have to wait and see if Twitter does the same.”
On Tuesday, before speaking at the Morgan Stanley conference, Mr Musk continued his attacks, calling Mr Thorleifsson “the worst.” He later deleted the tweet.
Then, in a series of follow-up posts, Mr Musk said he had a video call with Mr Thorleifsson on Tuesday afternoon and apologized for his “misunderstanding”. The billionaire said he had offered Mr Thorleifsson his job back.
“It’s better to talk to people than to tweet,” Mr Musk tweeted.
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2023-03-08 01:01:44
www.nytimes.com
