After acquiring Twitter Inc. for $ 44 billion, new owner Elon Musk plans to cut about 3,700 jobs or half of the total workforce of the social media giant.
According to informed sources, Musk wants to bring down costs. The new owner is set to inform those employees who will be in the firing line Friday, according to people who requested anonymity as the plan is private.
Musk also wants to stop Twitter’s current work policy from working from anywhere. He asked employees to report to offices with some exceptions.
The San Francisco-based Twitter is expected to face a series of policy changes. Musk and his advisory team are weighing different scenarios in the event of job cuts, with people saying that headcount reduction numbers could still change. In one scenario, the team is considering giving 60 day of severance package to the laid-off employees.
Reduce Overhead Costs
Musk is looking for ways to cut costs for a business he acquired that he thinks was overvalued. The Tesla owner and billionaire paid $54.20 a share for acquisition cost in April, after which the stock markets slumped. He then tried to wriggle out of the deal, alleging that Twitter had misguided him about the number of fake accounts on the social media platform. Twitter sued Musk legally, forcing him to close the deal on the original terms. The private deal was concluded Thursday.
Impending Layoffs
Existing employees of Twitter Inc. were getting ready for layoffs after CEO Parag Agrawal, Finance head Ned Segal, and senior legal executives Sean Edgett and Vijaya Gadde were immediately sacked after Musk took over. In the days after taking over, other departures included Sarah Personette, Chief Customer Officer; Leslie Berland, Chief Marketing Officer and Jean-Philippe Maheu, vice president, Global Client Solutions.
New Designation
Musk anointed himself as the Chief Twit, which was seen on his CV on the social network. Bloomberg News had reported earlier that Musk would initially take the role of interim CEO. After the acquisition, Musk dissolved the entire board and became the sole director, and he said the arrangement was temporary.
Last weekend saw employees holding positions of directors and vice presidents on the job cuts lists. Other managers were asked to submit a list of employees who would be asked to go.
The senior managers in the product team were asked to target reducing their team by 50%. Director-level staff and engineers of Tesla Inc, the carmaker owned by Musk, also reviewed the headcount, and pink slip lists were finalized. The layoffs were based on the individual’s contribution to Twitter during their tenure, and the assessment was done by both Tesla and Twitter Managers.
Concerns about massive layoffs were circulated when Musk, in his run-up to acquire Twitter told investors that 75% of the workforce would be eliminated, and musk later denied that 7,500 or 75% of the workforce would be cut at the end of 2021.
