Tesla CEO and Twitter chief Elon Musk has informed Twitter employees that the company’s “financial picture ahead is dismal.” Stating that “bankruptcy is not out of the question,” the billionaire emphasized that “without significant subscription revenue, there is a good chance that Twitter will not survive the coming economic downturn.”
Twitter can go bankrupt, says 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 dire financial situation. “There is no way to mask the message,” Musk wrote, adding:
Frankly, the future economic picture is bleak.
He went on to detail that the financial situation is worse for a company like Twitter, which is highly dependent on advertising in a challenging economic environment. “70% of our advertising is brand, not specific performance, which makes us doubly vulnerable,” he stressed.
Musk continued, “That’s why the development and launch of Twitter Blue Verified subscriptions has been a priority over the past ten days,” elaborating:
Without significant subscription revenue, Twitter is unlikely to survive the coming economic downturn. We need about half of our income for ordering.
However, Musk said the social media company will continue to be “significantly dependent on advertising,” so he’s working to “make sure Twitter continues to attract advertisers.” The billionaire emphasized: “The road ahead is difficult and requires intensive work to succeed.”
The CEO of Tesla and Spacex added that Twitter’s policy will be changed and remote work will no longer be allowed. Starting Thursday, all employees of the social media giant must be in the office at least 40 hours a week, unless they are physically unable to travel or have critical personal obligations.
In addition, Musk held an emergency meeting with Twitter employees on Wednesday. He says said:
Bankruptcy is not excluded.
After the meeting, two Twitter executives, Robin Wheeler and Yoel Roth, announced that they had left the company. Last week, Musk laid off about 50% of Twitter’s workforce, claiming he had no choice because the social media company was losing more than $4 million a day.
Musk admitted Wednesday that his new $8-a-month confirmation system has problems. “Way too many corrupt ‘Blue’ verification tokens, so no choice but to remove old Blue in the coming months,” he tweeted, despite claiming that Twitter usage has increased since he took over the platform.
This week, he outlined how Twitter could generate revenue as a payments company after filing paperwork with the US Financial Crimes Enforcement Network (FinCEN) to start a payments business.
Do you think Twitter will go bankrupt? Let us know in the comments section below.
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