Elon Musk is Reportedly Planning to Lay Off 75% of Twitter's Workforce

Joaquin Victor Tacla, Tech Times 21 October 2022, 02:10 am

The majority of Twitter's workers may be laid off by Elon Musk once he completes the buyout of the social media company, as reported first by the Washington Post and AP on Thursday, Oct. 20.

(Photo : CARINA JOHANSEN/NTB/AFP via Getty Images)
Tesla CEO Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 (ONS) meeting in Stavanger, Norway on August 29, 2022. - The meeting, held in Stavanger from August 29 to September 1, 2022, presents the latest developments in Norway and internationally related to the energy, oil and gas sector.

According to the report, Musk has informed potential investors in his acquisition of Twitter that he intends to lay off approximately 75% of the company's 7,500 employees, leaving it with a skeleton staff. Documents and unidentified persons familiar with the discussions were mentioned in the Washington Post story.

However, it is worth noting that Twitter and Musk's attorney Alex Spiro has not yet responded to the claims of the report.

According to Wedbush analyst Dan Ives, a 75% personnel reduction would suggest, at least initially, higher free cash flow and profitability, which would be appealing to investors eager to get in on the sale.

But Ives also noted that this kind of workforce reduction would likely cause the social media company to fall years behind.

Even though job cutbacks were anticipated regardless of the sale, Musk's proposal will be much more unprecedented than anything Twitter had in plan. Musk has previously hinted at the necessity to reduce the company's workforce, but he hasn't specified a number, at least not in public.

Musk's Twitter Purchase

Musk withdrew his $44 billion purchase offer for Twitter in April, claiming that Twitter had not been transparent about the amount of fake "spam bot" accounts it had on its network. A Delaware judge has given the parties until October 28 to resolve the issues raised by Twitter's lawsuit. A trial will take place in November if the conflict between the two parties remains unresolved.

But In an unexpected change of events, the tech CEO revealed to the public earlier this month that he is purchasing the social media platform for the original price of $44 billion.

The founder of Tesla defended his change of heart by claiming that Twitter would act as a catalyst for his upcoming endeavor to launch the "X" app.

According to CNN's report, Musk wrote to the bird app to inform them of his plans to proceed with the sale and buy the company. A Twitter spokesperson confirmed this offer, and the company hopes to conclude the transaction for $54.20 per share.

Musk would still pay the same amount of $44 billion to complete the acquisition and make the social media private for use by everyone.

The billionaire has returned to his initial intention of purchasing the social media for $44 billion after a public argument between him and Twitter ensued for some time. Elon Musk is now defending this change in strategy by pointing to the future of his X app, a platform about which the CEO is yet to reveal more details.

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Written by Joaquin Victor Tacla