Advertiser outflow and a significant debt burden, as the company’s new owner Elon Musk clarified in his address to Twitter employees, threatens bankruptcy. His new boss intends to avoid that not only through drastic corporate reforms, but also through the funds he received from the recent Tesla stock sale. At the same time, high-ranking leaders keep leaving the social network.
Among the measures taken to stabilize Twitter’s financial flows is the recent drastic reduction in staff by about half. Lea Kissner, who was responsible for information security, left Twitter this week. Previously, Damien Kieran, who was in charge of data security, and Marianne Fogarty, who oversaw Twitter’s regulatory compliance, took a similar step. The executive exodus comes at a bad time for the company. The US Federal Trade Commission has indicated that Elon Musk’s (Elon Musk) activities as head of Twitter cannot fall outside of the legal sphere and if necessary he will have to answer for his actions in court. Some of the anonymous Twitter contributors in their respective communities have expressed concern over the possibility of the company being fined billions of dollars over the new leader’s actions.
The deal with Elon Musk left Twitter with a heavy debt burden, the billionaire said in his speech to employees stressed the importance of early adoption of the $8/month Twitter Blue subscription to reduce the company’s reliance on advertising revenue. Elon Musk also intends to reduce operating costs. Among other things, employees who remain at their workplaces will no longer be provided with free meals. The ability to work remotely indefinitely has been eliminated for those who wish; Musk is willing to personally interview each candidate to maintain this form of work.
Of Twitter’s $13 billion in debt, $1.2 billion is due in the next 12 months, and at the end of June the company was generating no more than $1.1 billion in cash flow, so Twitter is in a really precarious financial situation. In early November, after completing the acquisition of Twitter assets, sold shares in Tesla for a total of $3.95 billion, which Elon Musk says he sold to save the social network.