Musk plans to fire half of Twitter staff

10/30/2022 2:15:19 PM
 Twitter headquarters is shown in San Francisco, Friday, October 28, 2022.
 photo: AP/ Jeff Chiu
Some managers have been asked to prepare lists of employees to be laid off.

Sources close to Twitter revealed that Elon Musk plans to start laying off employees at Twitter beginning Saturday, according to four people familiar with the matter who told the New York Times, and explained that he asked some managers to prepare a layoff list.

The Guardian reported that Twitter's new owner plans to cut 75 percent of the company's staff. According to the Washington Post, job cuts are expected across the company, no matter who is in charge.

Three sources said Musk, who closed a $44 billion deal to purchase Twitter on Thursday, ordered cuts across the company, with some departments shrinking more than others, but the size of the layoffs was not specified, as Twitter has about 7,500 employees.

Reports of layoffs have surfaced since Musk agreed to buy the company in April. The billionaire, who also directs the electric car giant Tesla and rocket maker SpaceX, told investors he would take Twitter, reduce its workforce, review content rules, and look for new revenue streams. Twitter won't be "Free-for-All Hellscape,' Addressing Advertisers' Concerns, Musk said earlier.

Twitter employees will be laid off before November 1st when employees are scheduled to receive stock grants as part of their compensation. These grants usually represent a significant portion of employees' salaries.

By laying off workers before that date, Musk could avoid paying these grants even though he is supposed to pay employees in cash instead of their stock under the terms of the agreement.

Gerber Kawasaki Wealth and Investment Management CEO Ross Gerber said Musk family office chief Jared Birchall told him layoffs were coming on Twitter. "I was told to expect somewhere that about 50 percent of the people will be laid off," he added.

Gerber added that his company invested less than $1 million to help fund Musk's acquisition of Twitter.

Musk, 51, has moved quickly since taking ownership of Twitter on Thursday. He arrived at the company's San Francisco headquarters on Wednesday and began meeting employees. Late Thursday, he fired the company's chief executive officer, chief financial officer, and other executives. He also made a plea to advertisers, who provide the bulk of Twitter's revenue, to tell them that the platform would be a respected advertising destination.

But Musk may take time to evaluate other sections of Twitter, such as deciding which posts to follow and remove on the site.

While he initially said he wanted Twitter to be a place free of all kinds of comments and would bring back banned users, including former President Donald Trump, Musk made clear on Friday that such changes would not happen immediately.

Instead, he announced that he plans to set up a board to deal with content questions and will not immediately reinstate banned users.

It is unlikely that Musk would pay the gold sums to be received by the top Twitter executives who were dismissed.

Under the merger agreement, those executives, including Paraj Agrawal, the chief executive, were set to receive compensation ranging from $20 million to $60 million if fired.

But Musk fired the executives for a "cause," meaning he did so with justification, which could invalidate that agreement, two people familiar with the matter said.

One person said those executives, including former chief financial officer Ned Segal, former general counsel Sean Edgett, and former top policy and law executive Vijaya Jade, are considering their next steps.

Musk is also testing Twitter engineers. Three people familiar with the matter said he and his team had been tasked with completing some projects. One of the projects, they said, included changes to the Twitter login screen. They added that some engineers worked late Friday night to complete the tasks.

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