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Musk plans to cut 75% of Twitter workforce, company warns of 'rumors’: Report
Even if the Twitter deal falls through, job cuts have been expected because of a reported plan by the company to cut about $800 million from its payroll by the end of next year.
Tech billionaire and investor Elon Musk has planned to lay off most of Twitter's workforce if and when he completes his $44 billion purchase of the social media company, according to a report by The Washington Post. While pitching his Twitter purchase deal to prospective investors, Musk said that he plans to cut nearly 75% of Twitter's workforce, leaving the company with just over 2,000 employees, the report said.
Twitter Inc., however, told its staff that there haven’t been plans for companywide layoffs since it signed a deal to be acquired by the billionaire and warned employees to expect “tons of public rumors and speculation” as the closing of the deal nears., reported Bloomberg.
“We do not have any confirmation of the buyer’s plans following close and recommend not following rumors or leaked documents but rather wait for facts from us and the buyer directly,” Twitter General Counsel Sean Edgett said in a memo.
Even if the Twitter deal falls through, job cuts have been expected because of a plan by the company to cut about $800 million from its payroll by the end of next year, the paper said. However, the magnitude of Musk's planned cuts are far more extreme than anything Twitter had planned.
"A 75% 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, as quoted by Associated Press. “That said, you can’t cut your way to growth."
After his initial $44 billion bid to buy Twitter, Musk backed out contending Twitter misrepresented the number of fake “spam bot” accounts on its platform. Twitter filed a lawsuit to hold Musk to the terms of the takeover deal but a US judge recently suspended litigation after Musk expressed a change of heart, giving the parties until October 28 to finalize the megadeal.
(With inputs from agencies)
