Elon Musk in his first address to the employees of Twitter Inc. since acquiring the company for $44 billion, has announced possible bankruptcy if the company doesn’t start generating more cash, writes Bloomberg.
The warning came two weeks after the completion of Musk’s purchase of Twitter, during which he managed to fire the CEO and a number of top executives, conduct a chaotic layoff, after which some were asked to come back and also employees were ordered to return to the office.
One of the executives who until Thursday was part of Musk’s new management team, Yoel Roth, has left, people familiar with the situation said. Another, Robin Wheeler, also resigned, but Musk convinced her to stay, said some of the people, who spoke on condition of anonymity to protect personal and professional relationships.
While the buyout took Twitter out of the public markets’ scrutiny, Musk loaded the company with nearly $13 billion in debt, which is now held by seven Wall Street banks. Twitter’s credibility has been eroded so quickly that even before Musk’s bankruptcy comments, some funds were offering to buy back its loans for as little as 60 cents on the dollar — a price usually reserved for companies deemed financially distressed.
In his address to staff, Musk issued some stark warnings. Employees must prepare for an 80-hour work week. There will be fewer office perks like free food. And he ended the pandemic-era flexibility that allowed employees to work from home.
“If you don’t want to come, resignation accepted,” he said, according to a person familiar with the matter.
When he was asked about the prospect of attrition, Musk said, “We all need to be more hardcore.”
Discussing Twitter’s finances and future, Musk said the company urgently needs to move forward to make the $8 Twitter Blue subscription something users want to pay for, given the exodus of advertisers from the platform over concerns about harmful content.
According to a person familiar with his management style, Musk has used the threat of financial collapse in the past to try to motivate employees. He’s trying to make the point that if people don’t work hard, Twitter is going to be in a very difficult position, the person said.