The CEO of Tesla, Elon Musk, has planned to lay off most of Twitter’s workforce when he accomplishes his $44 billion purchase of the social media company. The news was shared by The Washington Post, where they mentioned Elon’s Twitter purchase deal to prospective investors; Musk said that he plans to cut nearly 75% of Twitter’s workforce. He is planning to leave the company with just over 2,000 employees.
Twitter Inc. informed its staff that there hadn’t been plans for the company’s wide layoffs since it signed a deal to be acquired by the billionaire and warned employees to expect a lot of rumours and speculations among the people as the company is near to closing the deal.
Twitter General Counsel Sean Edgett mentioned in a memo that they do not have any confirmation of the buyer’s plans following close and recommend not following rumours or leaked documents but rather waiting for facts from the officials and the buyer directly.
The deal of Twitter has experienced a lot of falls, and the news of job cuts has been expected because of a plan by the company to cut about $800 million from its payroll by the end of FY23. However, the magnitudes of cutoffs planned by Musk are far more extreme than anything planned by Twitter.
Wedbush analyst Dan Ives, as quoted in an Associated Press, states a 75% headcount cut would indicate, at least out of the gates, stronger free cash flow and profitability, which is ultimately going to attract the investors that are looking to get in on the deal. As per the company, they can’t cut the ways of growth of the employees.
Right after the initial bid amount of $44 billion to buy Twitter, Musk backed out in contending Twitter misrepresented the number of fake “spam bot” accounts on its platform. The world has witnessed Twitter filing a lawsuit over Musk to hold to the terms of the takeover deal, but a US judge recently suspended litigation after Musk expressed a change of heart. The court gave the time October 28 to finalize the megadeal.