Inside Elon Musk’s cost-cutting drive at Twitter

From a secretive “battle room” at Twitter’s San Francisco headquarters final month, Elon Musk’s trusted lieutenants pored over an inventory of staff, displaying how a lot they price the social media firm.

The billionaire proprietor’s “transition staff,” headed by Steve Davis, who leads the Musk-owned Boring Firm, then started to cellphone staffers. Some have been requested to justify their position; others to suggest which colleagues to retain.

These deliberations knowledgeable Musk’s newest layoffs at Twitter, as a part of his efforts to convey the lossmaking firm to monetary well being whereas additionally battling an advertiser exodus and unwieldy debt servicing invoice.

The February cuts eliminated greater than 200 employees however have been nonetheless broader and deeper than many staff had anticipated, as a result of they got here after Musk had already laid off half of the corporate’s 7,500 workforce following his acquisition of Twitter in October. The transfer worn out giant swaths of its enterprise growth and product groups, leaving Twitter leaner—and extra unstable.

This account of the billionaire’s ongoing efforts to wrestle Twitter’s funds beneath management together with his inside circle is predicated on interviews with present and former Twitter staffers, individuals conscious of Musk’s considering, and his public statements on Twitter and to buyers.

Musk, Twitter, and most members of the transition staff didn’t reply to a request for remark.

Fashioned in November, the transition staff has usually refused to right away pay lots of Twitter’s distributors, landlords, and companions within the hope of maintaining down prices, in some instances irking purchasers and resulting in frosty stand-offs.

This push comes as Twitter is anticipated to roll out new fairness compensation packages for workers in late March, stated two individuals aware of the state of affairs. For tax functions, Twitter is within the technique of calculating a brand new valuation to cost the frequent fairness within the enterprise, which determines the worth of employees inventory choices, the individuals stated. One in every of them stated the valuation would most likely be far decrease than the $44 billion acquisition value.

At an investor convention hosted by Morgan Stanley final week, Musk stated he had reduce non-debt expenditures to $1.5 billion, from the $4.5 billion that he claimed it will have in any other case incurred in 2023, including that Twitter might attain constructive money movement by the second quarter.