As Elon Musk noted shortly after acquiring Twitter, the need for a significant reduction in the number of employees at the company was caused by the high cost of the social network functioning – it was losing literally $ 4 million a day. Discussing the impending bankruptcy, Twitter’s new owner explained that he sold Tesla shares in order to somehow improve the financial situation of the first of the companies. As it turns out, spending cuts at Twitter have reached serious proportions.
The staff team that Musk invited to Twitter in the first few days after buying this social network, it says The New York Times, prompted a serious scrutiny of the company’s spending. Additional bonuses and employee benefits provided by previous management were contested and scrapped by Elon Musk’s henchmen and the billionaire himself. Contracts for legal support for Twitter activities with third-party law firms have been terminated. Middle managers who were previously paid by employers for tourism trips found themselves in a situation where they had to out-of-pocket to compensate for the costs already incurred. The amount of such “hanging” compensation runs into the hundreds of thousands of dollars company-wide, the source explains.
At the corporate level, Twitter refuses to pay for some of the services provided by cloud service providers such as Amazon and Oracle and to transfer funds for the use of some software. Vendors of the latter refused to offer a license renewal discount after Elon Musk “came to power,” and the new head found the existing license terms unacceptable. Office lease contracts are reviewed worldwide. Twitter’s massively reduced staff simply doesn’t take up as much space as it used to.
Even the practice of offering employees free lunches is something Twitter intends to reconsider. According to some reports, this type of service cost the company more than $400 each in some offices, although company officials have questioned the reasonableness of such an estimate. Exotic dishes such as fried shrimp nevertheless disappeared from the menus of the company cafes, but macaroni and cheese and a certain selection of salads remained on the employee menu.
Twitter workers also complained about cuts in sports attendance allowances, cell phone and Internet fees, and childcare costs for working parents. Many employees have had to deal with the blocking of company credit cards. Programmers invited to San Francisco last weekend noted that not all of them received compensation for air travel for a personal meeting with Elon Musk at his initiative.
In addition, Twitter is currently evaluating partnership agreements with American sports associations that grant media rights to broadcast certain sporting events. Some of the contracts of this type were concluded for several years, but now their preservation is in question. Charitable spending will also be cut. In fact, of the $13 billion in debt it incurred after Elon Musk bought Twitter, the company is already slated to pay back $1 billion over the next year, so new management is trying to break down cost items in a stream of messy reforms to find the that can be cut.