According to people familiar with the matter, Elon Musk in his first address to Twitter Inc. employees since buying the company for $44 billion, said that there was a chance bankruptcy if the company doesn’t start generating more cash.
The cautionary remark came amid a turbulent start to Musk’s acquisition of the social media company — a two-week duration in which he has slacked off almost half of Twitter employees, heralded out most of the top liaison and ordered the remaining staff to terminate working from home. One more prominent executive who until Thursday was thought to be a part of Musk’s new leadership team, Yoel Roth, resigned from his post, people familiar with the situation said. According to a report by Bloomberg news, another executive, Robin Wheeler, also planned to resign initially— but Musk convinced her to stay on, said some of the people, who requested to be unknown in order to protect their personal and professional relationships.
While the takeover has removed Twitter from the inspection of public markets, Musk burdened the company with a debt of almost $13 billion that’s now in the hands of seven Wall Street banks that have been unable to discharge it to investors.
On Thursday, Bloomberg news reported that the company’s confidence and belief has crumbled so rapidly that, even before Musk’s bankruptcy remarks, some funds were offering to purchase the loans for as less as 60 cents on the dollar — a price typically set for companies deemed in severe financial crisis. In his address to staff, Musk issued multiple dour warnings. Employees should brace for 80-hour work weeks. There will be fewer office perks like free food. Soon after taking over office, Musk even ended the pandemic-era flexibility that allowed the staff to work from home.
According to a person familiar with the matter, Musk said, ““If you don’t want to come, resignation accepted.” When enquired about the likelihood of attrition, Musk said, “We all need to be more hardcore.” While discussing Twitter’s finances and future, Musk said the company needed to move quickly to make its $8 subscription product, Twitter Blue, something users will willingly pay for, as the advertisers who are concerned about harmful content have held back from Twitter. In the past used, Musk has used the threat of financial ruin in an attempt to motivate workers, which is said to be his key management style. He’s trying to bring forth the idea that if people don’t work hard, Twitter will get into a very difficult situation, The Information and Platformer earlier reported Musk’s statement on bankruptcy.
