Tesla CEO and Twitter chief Elon Musk informed Twitter employees that the “economic picture ahead is dire” for the company. Noting that “bankruptcy is not excluded“, the billionaire stressed that “without significant subscription revenue, there’s a good chance Twitter won’t survive the next economic downturn.“
Twitter could go bankrupt, according to 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’s no way to sugarcoat the message“, Musk wrote, adding:
Frankly, the economic picture ahead is dire.
He went on to detail that the economic situation is worse for a company like Twitter that is heavily dependent on advertising in a tough economic climate. “70% of our advertising is about the brand, rather than specific performances, which makes us doubly vulnerable“, he pointed out.
Musk continued, ” That’s why the priority over the last 10 days has been to develop and launch Blue Verified Twitter subscriptions “, stating:
Without significant subscription revenue, there’s a good chance Twitter won’t survive the coming economic crisis. We need about half of our revenue to come from subscriptions.
However, Elon Musk has stated that the social media company will always be “heavily reliant on advertising“, and that it therefore strives to “ensure that Twitter continues to be attractive to advertisers.“The billionaire pointed out, “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 that remote work is no longer allowed. As of Thursday, everyone employed by the social media giant is required to be in the office at least 40 hours a week, unless they are physically unable to travel or have critical personal obligations.
Wow. Elon Musk just told Twitter employees he’s not sure how much run rate the company has and “bankruptcy isn’t out of the question.”
– Zoë Schiffer (@ZoeSchiffer) November 10, 2022
Additionally, Musk held an emergency meeting with Twitter employees on Wednesday. He reportedly said.:
Bankruptcy is not excluded.
Following the meeting, two Twitter executives, Robin Wheeler and Yoel Roth, reportedly left the company. Last week, Musk laid off about 50 percent of Twitter’s employees, saying he had no choice since the social media company is losing more than $4 million a day.
Musk admitted Wednesday that his new $8-a-month check-in system is having problems. “There are far too many corrupted ‘verification’ hurdles in the old Blue system, so no choice but to scrap the old Blue system in the coming months“, he tweeted. Nevertheless, he insisted that Twitter usage has increased since he took control of the platform.
This week, he explained how Twitter could generate revenue as a payments company after filing paperwork with the U.S. Financial Crimes Enforcement Network (FinCEN) to launch a payments business.