Elon Musk, CEO of Tesla and head of Twitter, informed Twitter employees that the “economic picture to come is dire” for the company. Noting that “bankruptcy is not excluded“, the billionaire pointed out that “without meaningful subscription revenue, there’s a good chance Twitter won’t survive the next economic downturn.“
Twitter could go bankrupt, says Elon Musk
Elon Musk, the billionaire who bought Twitter for $44 billion about two weeks ago, sent his first email to all Twitter employees on Wednesday informing them of the social media platform’s grim financial situation. “There’s no way to water down the message“, Musk wrote, adding:
Frankly, the economic picture ahead is dire.
He went on to detail that the economic situation is worse for a company like Twitter which is heavily dependent on advertising in a difficult economic climate. “70% of our advertising is about the brand, rather than specific performance, which makes us doubly vulnerable“, he pointed out.
Musk continued: “ That’s why the priority for the last ten days has been to develop and launch Twitter Blue Verified subscriptions. “, specifying :
Without meaningful subscription revenue, there’s a good chance Twitter won’t survive the coming economic downturn. We need about half of our revenue to come from subscriptions.
However, Elon Musk said the social media company will always be “heavily dependent on advertising“, and therefore strives to “ensure that Twitter continues to be attractive to advertisers.The billionaire pointed out: “The road ahead is arduous and will require hard work to succeed“.
The Tesla and Spacex CEO added that Twitter’s policy was going to be changed and remote work was no longer allowed. From Thursday, everyone employed by the social media giant is required to be in the office at least 40 hours a week, unless they are physically unable to travel or have critical personal obligations.
wow. Elon Musk just told Twitter employees he’s not sure how much run rate the company has and “bankruptcy isn’t out of the question.”
— Zoë Schiffer (@ZoeSchiffer) November 10, 2022
Additionally, Musk held an emergency meeting with Twitter employees on Wednesday. He would have said:
Bankruptcy is not excluded.
Following the meeting, two Twitter executives, Robin Wheeler and Yoel Roth, reportedly left the company. Last week, Musk fired around 50% of Twitter employees, saying he had no choice as the social media company is losing more than $4 million a day.
Musk admitted on Wednesday that his new $8-a-month verification system has issues. “There are far too many corrupt ‘verification’ hurdles in the old Blue system, so no choice but to remove the old Blue system in the coming months“, he tweeted. Nonetheless, he insisted that Twitter usage has increased since he took over the platform.
This week, he explained how Twitter could generate revenue as a payments company after filing paperwork with the US Financial Crimes Enforcement Network (FinCEN) to launch a payments business.