Elon Musk plans to lay off a majority of workers when he becomes the owner of the social media company.
QUICK FACTS:
- Elon Musk told prospective investors in Twitter that he will cut nearly 75% of the workforce when he becomes owner, AP News reported.
- Although cuts have been expected at the company regardless of Musk’s ownership, the amount of prospective layoffs is far more than originally planned.
- “A 75% headcount cut would indicate, at least out of the gates, stronger cash flow and profitability, which would be attractive to investors looking to get in on the deal,” Wedbush analyst Dan Ives said.
- The news comes just months after Musk claimed he and other investors were “overpaying” for Twitter.
MUSK ON ‘OVERPAYING’ FOR TWITTER:
“I’m excited about the Twitter situation,” Musk said. “Obviously, myself and other investors are obviously overpaying for Twitter right now. The long term potential for Twitter in my view is an order of magnitude greater than its current value.”
BACKGROUND:
- Musk previously pulled out of the agreement to buy Twitter after a disagreement on how to deal with potentially fake Twitter accounts and how it could impact the evaluation of the company.
- In late August, Twitter was ordered to give Musk info on 9,000 Twitter accounts that were audited to estimate the percentage of fake accounts on the platform.
- That same month, Twitter’s former head of security came out against the company, alleging reckless and negligent cybersecurity policies.
- Musk nevertheless recently announced he would move forward with his buyout of Twitter, reportedly sending a letter to the company’s legal team with terms, including a merger at the earlier agreed-upon price of $54.20 per share.
