Elon Musk Sees Twitter’s Financial Recovery And Apologizes To Disabled Former Employee

Elon Musk said Twitter was on the mend financially after seeing a 50 percent decline in advertising revenue, making one of his first public disclosures about the social media company’s state since he acquired it last year.

At a conference hosted by Morgan Stanley in San Francisco on Tuesday, Musk, the new owner of Twitter, said he had taken drastic steps to improve the company’s financial health, cutting what he said was about $3 billion in operating expenses. . After the cuts, the company is likely to be cash flow positive in its second quarter, he said.

In the interview, which was conducted by Michael Grimes, a Morgan Stanley banker who helped broker Musk’s $44 billion acquisition of Twitter, the billionaire said the company would have gone bankrupt “in four months” if it weren’t for him. for its cost reduction. Since his acquisition closed in late October, Musk has laid off or laid off more than 3,750 employees, left vendors and owners unpaid, and wiped out the costs of cloud computing and one of the top three data centers. Twitter.

“In the absence of action, Twitter would have cost $6 billion and $3 billion in revenue,” Musk said. He added that previous projections had put costs at $4.5 billion and sales at $4.5 billion. Twitter posted $5.1 billion in revenue in 2021, up 37 percent from the previous 12 months, in the last full year it reported financial results.

Musk, however, appeared to take little responsibility for the change in the company’s financial outlook. He owes what he says is $1.5 billion a year to pay off the debt he took on to complete the deal. The drop in its ad sales, which in previous years accounted for about 90 percent of the company’s revenue, came amid pushback from advertisers as brands worried about rising hate speech and misinformation.

He said the decline in advertising was partly “cyclical” and partly “political” and blamed advertisers’ fears of the company’s portrayals in the media.

“Believe what you see on Twitter and not what you see in the newspapers,” Musk said.

Musk’s appearance came after Twitter dealt with a series of outages and glitches that have become more common under his ownership. On Monday, a bug left many users unable to click links, upload images or access certain parts of the site.

Musk also spent part of Monday and Tuesday sparring on Twitter with a former worker. After Haraldur Thorleifsson, an employee in Iceland whose design company was acquired by Twitter, tweeted at the billionaire to clarify whether he had been laid off, Musk accused him of using a disability as an “excuse” for not working, saying he was looking for “a big pay.” (Mr. Thorleifsson has muscular dystrophy and uses a wheelchair.)

While Mr Thorleifsson said on Twitter that he eventually did receive confirmation that he had been fired, he was still waiting for word on whether he would be “paid what I’m owed under my contract.” Because Twitter bought the company from him, Mr. Thorleifsson had a higher compensation package than most employees and expected to be paid in full if he were fired.

“My company was acquired, and as a result, I was required to work at Twitter for a certain period of time,” Thorleifsson said in an email to The New York Times. “I have fulfilled all aspects of my contract and now I need to wait and see if Twitter does the same.”

On Tuesday, before speaking at the Morgan Stanley conference, Musk continued his attacks, calling Thorleifsson “the worst.” He later deleted the tweet.

So, in a series of follow-up postsMusk said he had a video call with Thorleifsson Tuesday afternoon and apologized for his “misunderstanding.” The billionaire said he had offered Thorleifsson his job back.

“It’s better to talk to people than communicate through a tweet,” Musk tweeted.