Revenue declines, Tesla problems and ‘resignation’: Musk’s wild Twitter reign so far | Elon Musk

UElon Musk walked into Twitter’s offices on October 26 carrying a sink, a day before he bought the platform for $44bn (£38bn), it was the first sign that the tale of his ownership would be anything but conventional. “Let that sink in!” he tweeted. For everyone swept up in what followed—from thousands of Twitter employees to advertisers and critical journalists—it certainly is now.

Musk’s management since then has proven unpredictable and at odds with Tesla’s CEO loses the title of the richest man in the world in the process. Here are some of the highlights from these eventful past 10 weeks:

Laying off half the workforce

As soon as Musk took over Twitter, he fired senior executives including: CEO Parag Agrawal; Ned Segal, Chief Financial Officer; and Vijaya Gadde, head of legal policy, trust and safety. Days later, he axed 50% of the company’s 7,500 employees with the affected areas, including the communications team, the curation department that helped counter the disinformation and human rights team.

More departures followed a strange episode in which Musk gave employees a mid-November deadline commit to working “long, high-intensity hours” and being “extremely hardcore” or leaving with three months’ compensation. According to one estimate, this led to the departure of another 1,200 employees. Musk now says Twitter has about 2,000 employees. Around the same time, Twitter was reported to have laid off 4,000 contractors in areas including content moderation and engineering.

In response to predictions of Twitter’s demise in late November, Musk tweeted: “Shouldn’t Twitter have died by now or something…?” However, the platform, which has faced warnings of technical issues after releasing so much expert staff, suffered an outage on December 28, which affected some users.

Musk said the layoffs were necessary because Twitter was losing $4 million a day. That’s a staggering number for a business that must make payments on more than $1 billion of the nearly $13 billion in debt it now has on its balance sheet as part of financing the acquisition. Musk said in December that Twitter was facing a “negative cash flow situation of $3 billion per year” but argued that the company should “roughly” reach cash flow profitability following his cost-cutting efforts.

Twitter botched the relaunch of its premium Blue service. Photo: NurPhoto/Rex/Shutterstock

Alienated advertisers and subscription failures

Musk acknowledged that Twitter suffered “huge drop in revenue” after the takeover, which he blamed on campaign groups lobbying advertisers for the future of safety and content guidelines under Musk. Automaker Audi, pharmaceutical company Pfizer and General Motors were among the brands which halted platform spending immediately after the takeover. That’s a significant problem for a company that made 90% of its more than $5 billion in 2021 revenue from advertising.

The ad freeze was exacerbated by the botched relaunch of Twitter’s premium service, Blue, which led to a slew of copycats jumping at the chance to launch “fake” verified business accounts for as little as $8 a month. The companies affected include pharmaceutical firm Eli Lilly & Co and Musk’s own Tesla, resulting in a temporary suspension of service.

The damage is being repaired. Twitter is working with the World Federation of Advertisers, which says its membership accounts for 90% of global ad spending, to address advertisers’ concerns, plus Blue has restarted again no resurgence of the fake account problem.

The new service offers verified status — via a blue tick or checkmark — for $8 a month or $11 a month on their iPhone. Musk believes mass verification is the best way to defeat pesky spam accounts, one of his comments on Twitter. Other benefits promised by the subscription service include an edit button, a 50% reduction in the number of ads in a user’s feed, and the ability to post longer tweets.

Revenue declines, Tesla problems and ‘resignation’: Musk’s wild Twitter reign so far |  Elon Musk
Musk reinstated Donald Trump’s Twitter account, among others. Photo: Stanislav Kogiku/SOPA Images/Rex/Shutterstock

Recovering banned accounts

Musk lifted the suspension of accounts run by Donald Trump, former British-American kickboxer Andrew Tate – who was banned for extreme misogynistic posts and was on Friday arrested in Romania on charges of human trafficking, rape and the creation of an organized criminal group – and Canadian psychologist Jordan Peterson, among others. The account of American rapper Ye – formerly Kanye West – was also restored, but then stopped again after tweeting an image of a swastika mixed with a Star of David.

At the same time, Musk announced a new content policy of “freedom of speech, but not freedom of reach,” saying that “negative/hateful” tweets would be “toned down” and no ads would appear near them.

The refunds were another sign of the inconsistent behavior that would mark Musk’s tenure in the coming weeks, after he said no decisions on refunds would be made until a newly announced “content moderation council” was assembled. He blamed the apparent backsliding on unnamed “political/social activist groups”, accusing them of persuading advertisers to stay away.

Removal of journalists

In mid-December, Musk contradicted his stance on free speech by freezing the accounts of prominent tech journalists on CNN, the Washington Post, Mashable and the New York Times. He accused them of violating a newly created Twitter guideline that prohibits users from posting “live location information” that would “reveal a person’s location, regardless of whether that information is publicly available.” This guideline was created as an apparent justification for the suspension of @ElonJet, a Twitter account that had long teased Musk by showing the location of his private jet via publicly available information.

The journalists were reinstated days later after Musk launched a poll on his own Twitter account that returned a majority in favor of lifting the suspensions. But Musk’s targeting of journalists drew condemnation UN, EU and campaign groups.

Also in December, Musk released internal documents on Twitter about selecting journalists in a project called “Twitter Files”. The documents showed the internal process behind decisions to suspend Donald Trump’s account in 2021 and the platform’s response to the Hunter Biden laptop story. Another excerpt from the files raised questions about Twitter’s relationship with the Pentagon.

Elon Musk during the chancellor's visit to the Tesla Gigafactory Berlin-Brandenburg in Grunheide
Tesla shares are down 70% to $122 year to date. Photo: Action Press/Shutterstock

Dragging Tesla into it

Musk’s status as CEO of Tesla is the key to his wealth and made him the richest man on the planet, before losing the title to luxury mogul Bernard Arnault in December. The performance of the electric car maker, in which Musk holds a significant stake, has soured as his interest in Twitter has grown. Musk’s involvement in the platform first surfaced in early April with the revelation that he owns it a large stake in the businessfollowed weeks later by a deal to buy the company, which he initially pulled out of – resulting in a lawsuit – before returning to complete it two months ago.

In 2022, Tesla shares fell 70% in value to $123. Some of this is specific to Tesla, such as slowing demand and fears of a Covid shutdown at Chinese factoriesbut Musk’s repeated sales of Tesla stock to fund his Twitter purchase — despite saying in April he had no more planned — plus concerns that he was focusing too much on the social media platform also rattled investors.

“Musk has lost credibility with the broader investment community as broken promises (selling stock over and over and over…), the Twitter fiasco, the opening of a political Twitter storm, and brand deterioration for Musk and Tesla have led to a complete debacle for stocks,” said Dan Ives, managing director of financial services company Wedbush Securities.

A majority of Twitter users voted for Musk to step down as CEO
A majority of Twitter users voted for Musk to step down as CEO. Photo: Andre M Chang/ZUMA Press Wire/REX/Shutterstock

“Resigning” as boss

Musk said on December 20 that he would step down as CEO of Twitter “As soon as I find someone stupid enough to take the job!” His announcement followed a poll on his Twitter account in which users voted overwhelmingly in favor of its withdrawal. The promise followed testimony in court in November in which he said he expected to “reduce his time on Twitter” after an “initial burst of activity.” Whoever takes the job will manage a globally influential social media platform with more than 250 million daily users. But with a very demanding and impulsive owner.

“One of the first things I said after the acquisition closed was like, ‘we’re going to make a bunch of mistakes, but then we’re going to try to recover from them quickly,’ and that’s what we’ve done,” Musk told the All-In Podcast. released days after he announced his retirement. But for Tesla’s CEO, the biggest mistake — with less chance of full recovery — may have been buying Twitter in the first place.

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