Musk Plans To Cut 75% Of Twitter Workforce, Report Says

TOPLINE

Billionaire Elon Musk plans to shrink Twitter’s staff by nearly 75% after his long-delayed deal to take over the social media company closes, according to the Washington Post, in a massive downsizing that could impact user experience.

KEY FACTS

Musk reportedly informed prospective investors he plans to cut Twitter’s workforce from 7,500 to around 2,000.

Twitter already planned to cut around a quarter of its workforce in the now-unlikely event Musk’s $44 billion takeover falls through, as the company aims to slash payroll by $800 million by the end of 2023, according to the Post, citing corporate documents and people familiar with internal discussions.

The company’s planned cuts reportedly include critical infrastructure like data centers, which could make it more difficult to police information and defend against security risks for Twitter’s more than 200 million estimated daily active users.

Musk and Twitter did not immediately respond to requests for comment from Forbes.

WHAT WE DON’T KNOW

Musk has a stated goal of “authenticating all humans” on Twitter and significantly cutting down on spam accounts on the platform. It’s unclear whether laying off 75% of the company’s workforce will clash with that push.

WHAT TO WATCH FOR

Musk has until October 28 to close the deal to buy Twitter, per a Delaware judge’s order, or he will face a trial to potentially force the deal through. Twitter sued Musk after he attempted to call off the deal earlier this year, and a trial was originally set for this month, but Musk confirmed two weeks ago he’s willing to buy the company at the originally agreed-upon price. If the deal closes, Twitter will become a private company controlled by Musk.

KEY BACKGROUND

Twitter has struggled with profitability for years and Musk has suggested he plans to radically transform the company to improve its financial situation, but he’s offered few concrete details of how that will be accomplished. Musk floated layoffs during a June town hall meeting with Twitter’s staff, saying he didn’t see a reason to keep low performers around. The billionaire has also said he may institute a subscription service for premium content on the platform, and he reportedly told investors Twitter will triple the number of users who see ads within his first three years of ownership.

TANGENT

Dozens of major U.S. companies have instituted layoffs this year in response to an economic downturn and fears of an imminent recession. Read the full list here.

FORBES VALUATION

We estimate Musk to be worth $209.4 billion, largely due to his stakes in Tesla and SpaceX, making him the richest person in the world.