- Musk is expected to own Twitter by the end of next week, but hasn’t done much for the transition.
- Reports vary on what he intends to do with the company, but “huge cuts” are expected.
- “Nobody knows who or how this thing works after the close,” said a person familiar with the deal.
As billionaire Elon Musk edges closer to becoming the new owner of Twitter, one of the only things people inside the company and close to the deal seem to agree on is that his reign will be chaotic. .
Musk’s $44 billion deal is heading for a close at the end of next week, likely Friday, two people familiar with the situation told Insider. Beyond that, it’s unclear what the next step will be, though Twitter will almost certainly see heavy staff cuts, including CEO Parag Agrawal and other senior executives, sources said.
Biden administration officials have discussed a security investigation into some of Musk’s dealings, including his acquisition of Twitter, Bloomberg reported, but it’s not seen as a real threat to the deal because it there are no active investigations and none appear to be forthcoming. , according to a person familiar with the matter. A bigger problem might be that Musk has done “absolutely no” transition work for his impending takeover, this person added.
While there’s no transition work done by Musk yet, he’s expected to make “huge reductions” in Twitter’s current staff, this person said. Senior executives like Agrawal are likely to be fired “almost immediately”, they added.
“No one knows who or how this thing works after the close,” said another person familiar with the company and the transaction. Twitter declined to comment. Representatives for Musk did not respond to a request for comment.
The Washington Post reported on Thursday that Musk had told potential co-investors in the Twitter deal that he intended to cut Twitter’s workforce by up to 75%, leaving it with around 2,000 people.
Twitter reported last year that it had grown to 7,500 people, but it continued to hire earlier this year and rose to around 8,200 people in June, as Insider previously reported. Deep cuts have been expected for months, and Musk told employees in his one and only meeting with them in June that they could expect layoffs in order to make the company “sound”.
“I don’t take any action that disrupts the health of the business,” Musk said during the meeting. Workers began leaving the company in droves after Musk’s comments, as Insider previously reported.
While Musk likely needs some executives to stay, C-suite members have little incentive to do so. Several are entitled to massive payouts with “change of control” clauses in their contracts: Agrawal will receive $38.7 million as long as Musk fires him; Ned Segal, Twitter’s CFO, is set to receive $25.4 million; Vijaya Gadde, legal director, $12.5 million; and Sarah Personette, Chief Client Officer, $11.2 million.
If Musk goes ahead and ultimately decimates Twitter’s workforce, employees said it would “just cause chaos” and be “crazy.” Another employee admitted, “you could run Twitter with like 2,000 people,” although no one in the company wants that.
“You certainly wouldn’t innovate with it, but you would be able to make it work,” the person added. “Basically, this thing hasn’t changed since it was built.”
Another staffer estimated that the combined salaries of those many employees could roughly equal the $1.5 billion in Twitter debt that Musk will have to pay off next year.
A few months ago, before Musk tried to back down from buying Twitter altogether, The New York Times reported that the deck Musk had shared with potential investors and banks actually detailed an uptick in Twitter. nearly 50% from today, over the course of about three years.
Since then, Musk has said his renewed commitment to acquiring Twitter is part of his plan to make X his “app for everything.” He mentioned the hugely popular WeChat “super app” in China as an example. To bring so many new features to Twitter, Musk would probably need over 2,000 people to do it.
By comparison, WeChat, which has more than 1 billion daily active users, has around 3,000 people working there, according to a person familiar with WeChat’s business.
Known for being mercurial and prone to changing his mind, Musk may have done just that by telling investors how many people Twitter needs to operate. More likely, Musk wants as many people as possible to leave the company, instead of having to deal with layoffs and any severance pay considerations that may be in employment contracts, two people close to him said. of the agreement.
Musk could do whatever he wants. The next Twitter equity event, when employee shares vest, will be November 1. Under the terms of the Musk deal, employee shares will now translate into cash upon vesting, instead of new awards of company stock, like Insider did before. reported. Three current employees said many colleagues planned to leave on or immediately after November 1, as many did after the last equity event in early August.
Are you a Twitter employee or someone with ideas to share? Contact Kali Hays at [email protected], on the secure messaging app Signal at 949-280-0267, or via Twitter DM at @hayskali. Reach out using a non-professional device.
#Elon #Musks #Twitter #deal #prepares #close #insiders #expect #chaos #burns #company #ground #rebuilds #super #app