Since Tesla’s CEO took over last month, the company has been hit by major job cuts, advertiser boycotts, warnings of bankruptcy and now mass resignations among its remaining staff. Unsurprisingly, topics trending on Twitter this morning included #RIPTwitter and #TwitterMigration as the unrest worsened. Here we answer some questions about the size of the crisis.
How many employees have left Twitter?
Musk laid off about half of his 7,500-person workforce in the first week of November, within days of taking office. That left about 3,750 workers. Overnight, an unspecified number of those employees quit after Musk gave them a deadline of 5 p.m. ET on Thursday to accept “long, high-intensity hours” and be “extremely hard-working” or else leave with severance pay three months. According to one report, 75% chose the layoff, which would leave fewer than 1,000 employees at Twitter. What I’m hearing from Twitter employees. It appears that about 75% of Twitter’s remaining 3,700 employees have not opted out after the “hardliner” email. Even though the deadline has passed, everyone still has access to their systems. — Kylie Robison (@kyliebytes) November 17, 2022 The departures have affected a number of departments, including the press team, meaning questions about the scale of the cuts and the impact on the platform now remain unanswered. Instead, ex-employees fill the gap. I just woke up to the news that more Tweeps were briefly released last night. At this rate there won’t be anyone left to run Twitter. — Eric Frohnhoefer @ 🏡 (@EricFrohnhoefer) November 15, 2022
Could Twitter collapse?
Evidence on social media showed that several engineers left after Musk’s ultimatum, despite Twitter’s new owner stressing that the new company will be “much more engineering” under his ownership and that “those who write great code they will make up the majority of our team.” Alex Hern’s weekly dive into how technology is shaping our lives Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Now there are concerns that the site will be vulnerable to technical breakdowns and bugs, amid signs that the complex system that underpins Twitter is already creaking. Two-factor authentication has already been affected and there have been issues with retweeting. Steven Murdoch, professor of security engineering at University College London, said the platform may struggle to handle “complex failures”, perform manual maintenance or deal with security threats. Simply replacing engineers who left will be difficult. “Twitter could try to hire new staff or reassign existing staff, but updating how the relevant systems work can take months, even with a smooth handover process. Every major site has developed its own unique system, and anyone coming from the outside will have a steep learning curve.” Even before Musk arrived, there were signs of trouble. Twitter’s former chief security officer, Peiter Zatko, has warned that information security standards were inadequate. He feared that Twitter could suffer an “Equifax”-level hack, citing the 2017 attack on a credit reporting company that exposed the data of 147 million people in the US.
Could Twitter Go Bankrupt?
Musk warned this month that the company could collapse, saying that without growth in subscription revenue it may not survive the coming recession. Advertising accounts for 90% of Twitter’s $5.1bn (£4.3bn) annual revenue, but this source of revenue has been hit hard by spending freezes by major clients such as General Motors and company behind the Cheerios and Lucky Charms cereal brands. Musk confirmed there was a “massive drop” in ad revenue after the acquisition. The financial woes — Twitter has lost 10 of the past 12 years — were exacerbated by a botched relaunch of its subscription service Twitter Blue, which stalled when imitators began offering to “verify” for a simple $7.99 a month payment.
What if advertisers don’t come back?
This would be very serious for Twitter. The company has added nearly $13 billion in debt to its balance sheet since the acquisition and incurs interest costs of about $1 billion a year. One measure of a company’s ability to pay these costs is its cash flow. According to Twitter’s latest set of quarterly results as a publicly traded company, Twitter generated negative free cash flow (spending more cash to run the business than it needs) of nearly $124 million. Farhad Divecha, chief executive of UK digital marketing firm Accuracast, said fears about “brand safety” on Twitter were already a concern for advertisers. Now they will worry about the quality of service they will get from Twitter staff, he added. “Staff attrition obviously looks like a problem. And even if Elon didn’t want to negatively impact ad services, as the company that manages advertiser budgets, we’re concerned about the quality of service we’re getting from Twitter ad support and the Twitter account managers that service the company’s account. us and our customers”. accounts,” he said.
