Elon Musk‘s bid to own a significant portion of Twitter has been keeping all eyes on the billionaire as he has gone back and forth on his plans to buy the social media company. The latest news to come from the deal is that Elon Musk is planning to cut 75 percent of Twitter’s workforce once the deal goes through, or if the deal goes through more like it.
Musk told prospective investors that he wishes to oversee the cutting of the majority of the 7500 staff at Twitter taking it down to a skeleton crew. Job cuts had always been on the table for the company that has seen some struggle in recent times, but what Musk has proposed is more extreme than anyone could imagine.
According to investment analyst, Dan Ives, who was quoted in The Associated Press, “a 75 percent headcount cut would indicate, at least out of the gates, stronger free cash flow and profitability, which would be attractive to investors looking to get in on the deal.” He went on to say, “That said, you can’t cut your way to growth.” He also was reported to say that this kid of cut would set the company back years.
With such a huge reduction in the workforce, it could be near impossible to maintain control over issues Twitter already struggles with such as identifying bots and hate speech in order to remove them from the site. Musk said he will handle them personally if he becomes the owner of the company. The Tesla owner’s take-over attempt of the company is in part due to his criticisms of Twitter’s handling of “free speech”. Musk, known for his right-wing tendencies, would likely reinstate people like Donald Trump to the social platform after the latter was banned for inciting the January 6th riots in Washington DC.
This statement may just be a smokescreen to distract us all from the potential legal proceedings that may get underway if Musk fails to follow through on his promise to buy the company. He spent three months this year trying to back out of the deal, arguing that he had been given incorrect numbers regarding the actual number of bot and spam accounts as the reason. This too may be a way of hiding the truth that he is struggling to come up with the money to pay the agreed-upon $54.20/share offer.
Twitter sued Musk for trying to back out of the deal, with a Delaware judge giving the sides until Oct. 28th to come to an agreement. If by that time an agreement has not been worked out, Twitter can sue the billionaire for breach of contract. This promise of a 75 percent reduction in staff may look enticing to investors that Musk needs to make up the money, but could ultimately spell doom further down the line for Twitter. If he fails to go through with the acquisition, it would spell doom for Musk though, and with a court case potentially forcing him to open up about his management of SpaceX and Tesla, he could end up losing those too.
Published: Oct 20, 2022 09:22 pm