Tesla CEO and Twitter chief Elon Musk informed Twitter employees that “the company’s future economic situation is dire.” Noting that “bankruptcy is not out of the question,” the billionaire pointed out that “without significant subscription revenue, there’s a good chance Twitter won’t survive the coming economic downturn.”
Twitter could go bankrupt, says Elon Musk
Elon Musk, the billionaire who bought Twitter for $44 billion about two weeks ago, sent his first email to all Twitter employees on Wednesday informing them of the social media platform’s grim financial situation. “There is no way to water down the message,” Musk wrote, adding:
Frankly, the economic situation ahead is dire.
He went on to say that the economic situation is worse for a company like Twitter that relies heavily on advertising in a difficult economic climate. “70% of our advertising is a brand rather than a specific performance, which makes us doubly vulnerable,” he pointed out.
Musk continued, “That’s why the priority over the past ten days has been to grow and launch Twitter Blue Verified subscriptions,” adding:
Without significant subscription revenue, there’s a good chance Twitter won’t survive the coming economic downturn. We need about half of our income to be subscriptions.
However, Musk said the social media company will always be “significantly dependent on advertising”, so he is working to “ensure that Twitter continues to appeal to advertisers”. The billionaire stressed, “The road ahead is arduous and will require hard work to succeed.”
The Tesla and Spacex CEO added that Twitter’s policy will be changed and remote work is no longer allowed. From Thursday, everyone employed by the social media giant must be in the office for at least 40 hours a week, unless they are physically unable to travel or have critical personal obligations.
Additionally, Musk held an emergency town hall meeting with Twitter employees on Wednesday. He would have said:
Bankruptcy is not out of the question.
After the meeting, two Twitter executives, Robin Wheeler and Yoel Roth, reportedly left the company. Last week, Musk fired around 50% of Twitter employees, saying he had no choice as the social media company was losing more than $4 million a day.
Musk admitted on Wednesday that his new $8-a-month verification system had issues. “Too many corrupted legacy blue checkmarks exist, so no choice but to remove blue legacy in the coming months,” he tweeted. Nonetheless, he insisted that Twitter usage has increased since he took over the platform.
This week he explained how Twitter could generate revenue as a payments company after filing paperwork with the US Financial Crimes Enforcement Network (FinCEN) to start a payments business.
Do you think Twitter will go bankrupt? Let us know in the comments section below.
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