Twitter in an email to its employees said it does not have any company-wide layoff plans as the microblogging platform signed a deal to be acquired by Tesla chief Elon Musk, according to news agency Reuters.
Twitter General Counsel Sean Edgett emailed employees on Thursday saying the company does not plan layoffs, according to a source who viewed the email.
The Washington Post earlier reported that Musk is planning to get rid of nearly 75% of the company’s 7,500 workers. The newspaper cited documents and unnamed sources familiar with the deliberations.
Meanwhile, lawyers and bankers of both the parties – Musk and Twitter — are engaged in preparing paperwork for the takeover deal to be completed by the October 28 court-issued deadline, according to people familiar with the matter quoted by Bloomberg.
San Francisco-based Twitter and a representative for Musk attorney Alex Spiro did not immediately respond to messages seeking comment.
While job cuts have been expected regardless of the sale, the magnitude of Musk’s planned cuts are far more extreme than anything Twitter had planned. Musk himself has alluded to the need to cull some of the company’s staff in the past, but he hadn’t given a specific number, at least not publicly.
“A 75 per cent headcount cut would indicate, at least out of the gates, stronger free cash flow and profitability, which would be attractive to investors looking to get in on the deal,” said Wedbush analyst Dan Ives. “That said, you can’t cut your way to growth.”
Ives added that such a drastic reduction in Twitter’s workforce would likely set the company back years.
Already, experts, nonprofits and even Twitter’s own staff have warned that pulling back investments on content moderation and data security could hurt Twitter and its users.
With as drastic a reduction as Musk may be planning, the platform could quickly become overrun with harmful content and spam – the latter of which the Tesla CEO himself has said he’ll address if he becomes owner of the company.
