Elon Musk tells Twitter staff about possible bankruptcy, top executives leave
The world's richest person Elon Musk has warned staff at this newly acquired social media company that bankruptcy was very much a possibility at Twitter. The result has been an exodus of top executives at the company, The Guardian reported.
Nearly two weeks after finally agreeing to acquire Twitter, Musk held an all-hands meeting at the company and once again spoke about the amount of money the company was losing. According to The Information, Musk warned that the current cash outflow rate at the company would lead to a negative balance of billions of dollars by 2023. His idea of Twitter Blue subscriptions was the only way to keep the company alive.
Advertising revenues have dropped across social media companies such as Meta and YouTube amidst fears of inflation. Although Twitter's advertisement business contributes little to its revenue stream, the flow of money has declined severely after Musk's takeover. Multiple brands have paused their advertisements on the platform with little clarity on the content moderation policy on the platform.
The exodus of top executives
Musk had deputed Yoel Roth, the head of safety and integrity, and Robin Wheeler, the head of client solutions at Twitter, to speak to advertisers in a live stream in an attempt to resume advertising. However, a day later, after Musk's all-hands meeting, Roth and Wheeler both quit the company.
Chief Information Security officer Lea Kissner, chief privacy officer Damien Kieran, and chief compliance officer Marianne Fogarty also left the company earlier in the day, The Guardian said in its report.
Although the possibility of bankruptcy might be a reason for the departure, Musk's management style might also contribute to the decision to quit. Since his arrival, Musk has redrawn Twitter's policies for its employees, asking them to put in 12-hour shifts and reiterating at the all-hands meeting that everybody must work from an office or leave.
Drawing FTC's ire
Last week, Twitter reduced its workforce by half, putting severe pressure on its staff on how it would handle content moderation workload. However, the recent departure of some of the heads of the departments has drawn the ire of the Federal Trades Commission (FTC), the second this year.
Earlier in May, when Twitter was still working at full strength, the company reached a settlement with the FTC over privacy issues and is required to perform privacy reviews of any changes to its products.
According to The Verge, Twitter's legal team, now led by Musk's favorite lawyer, Alex Spiro, is asking engineers to self-certify that changes they make comply with the FTC rules and privacy standards. Musk's approach involves high risk and could even end up in additional fines.
Musk's much-touted $8-a-month subscription plan has also sprung up new problems with scammers and pranksters using the service to impersonate famous people and brands. Twitter's engineers are now working to weed out such accounts as well.
It remains to be seen how much of the bankruptcy of Twitter is the result of its loss of revenues and how much is the result of Musk's haphazardly implemented policies.