Elon Musk warns Twitter could face bankruptcy as top executives flee

Elon Musk told Twitter staff on Thursday to prepare for “tough times ahead” and warned the company could go bankrupt if it doesn’t find new ways to make money.

Speaking at an all-employee meeting on Thursday, Musk said Twitter was losing money and “bankruptcy is not out of the question,” according to reports from Platformer and Bloomberg.

The revelations marked another whirlwind day since Musk took control of the social media platform.

Late Wednesday evening, Musk sent his first email to employees, ordering them to stop working from home and report to the office Thursday morning, reversing the work from anywhere policy Twitter implemented during the pandemic.

“Sorry this is my first company-wide email, but there’s no way to water down the message,” Musk wrote, before describing a dire economic climate for companies like Twitter that almost depend entirely advertising.

“Without significant subscription revenue, there’s a good chance Twitter won’t survive the coming economic downturn,” Musk said. “We need about half of our revenue to be subscriptions.”

The next day, Musk convened his first “everyone” meeting, where he gave a gloomy assessment of the company’s finances and elaborated on the in-person work requirement.

Musk said while “exceptional” workers would be allowed to work remotely, others who didn’t like it could quit, said an employee at the meeting who spoke on condition of anonymity for safety reasons. ‘use. Musk himself is known for his strenuous work weeks and claimed to have worked 120 hour weeksincluding the 24 hours of his 47th birthday.

“He was never a fan of remote work from the start,” MarketWatch reporter Andrew Keshner told CBS News.


Elon Musk lays off senior executives after Twitter takeover

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Dismissals, then resignations

Half a dozen top executives quit Twitter this week, following the carnage of around 3,700 layoffs last weekthat’s half of Twitter’s workforce.

Departures include Twitter’s chief privacy officer, Damien Kieran; its compliance officer, Marianne Fogarty; and its chief information security officer, Lea Kissner, who tweeted on Thursday that “I have made the difficult decision to leave Twitter.”

The latest resignations also include that of Yoel Roth, Twitter’s head of trust and safety, a previously little-known executive who became the public face of the company’s content moderation after Musk took over. An executive confirmed Roth’s resignation to colleagues on an internal bulletin board seen by The Associated Press.

Roth’s resignation is a “huge loss” to Twitter’s reliability and integrity, said his former colleague and friend Emily Horne.

“He worked incredibly hard under very difficult circumstances, including being personally targeted by some of the most vicious trolls that were active on the platform,” said Horne, who oversaw global political communications on Twitter until 2018. “He stuck through it all because he believed so much in the work his team was doing to promote a public conversation and improve the health of that conversation.”


Twitter asks dozens of former employees to return days after mass layoffs

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Since the layoffs, Twitter has asked some of the laid off employees to return. In the meantime, experts say the significantly reduced headcount will likely make it harder for the platform to meet its legal obligations to ensure user data privacy.

Cybersecurity expert Alex Stamos, Facebook’s former chief security officer, tweeted Thursday that there is “serious risk of a breach with significantly reduced staff” that could also put Twitter at odds with a 2011 Federal order. Trade Commission which required him to deal with serious data security breaches.

“Twitter has made huge strides toward a more streamlined internal security model and a rollback will put them in trouble with the FTC” and other regulators in the United States and Europe, Stamos said.

FTC is watching

The FTC said in a statement Thursday that it “is following recent developments on Twitter with grave concern.”

“No CEO or company is above the law, and companies must follow our consent decrees,” the agency’s statement said. “Our revised consent order gives us new tools to ensure compliance, and we’re ready to use them.”

The FTC wouldn’t say whether it was investigating Twitter for potential violations. If so, he is empowered to demand documents and file employees.

In an email to employees seen by the AP, Musk said “Twitter will do whatever it takes to comply with both the letter and the spirit of the FTC’s consent decree.”

“Anything you read to the contrary is absolutely false. The same goes for all other government regulatory matters where Twitter operates,” Musk wrote.

Twitter paid a $150 million fine in May for violating the 2011 consent order. Its updated version established new procedures requiring the company to implement an enhanced privacy program as well as strengthen information security. The new procedures also require the company to include a comprehensive list of disclosures Twitter must make to the FTC when introducing new products and services, particularly when they affect personal data collected about users.

“If Twitter is sneezing, it needs to do a privacy review first,” tweeted Riana Pfefferkorn, a Stanford University researcher who said she previously provided Twitter outside of legal advice.


MoneyWatch: Twitter delisted from the New York Stock Exchange

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Musk is fundamentally overhauling the platform’s offerings and it’s unclear if he’s talking to the FTC about it. Twitter, which emptied its communications service, did not respond to a request for comment from the AP on Thursday.

The Mercurial CEO, who has been fined for cavalier tweets in the past, has a history of entanglement with regulators. “I don’t respect the SEC,” Musk said in a 2018 tweet, referring to the Securities and Exchange Commission.

The consequences of failing to comply with FTC requirements can be severe, such as when Facebook had to pay $5 billion for violation of privacy.

Appeal to runaway advertisers

Musk’s memo and staff meeting echoed a conversation streamed live on Twitter Spaces on Wednesday in which Musk tried to appease advertisers, who were leak twitter, citing an increase in hate speech on the platform, since he took control of it late last month and fired its top executives.

Advertisers whose Maker of Oreo MondelezAllianz, Audi, General Mills, GM, United Airlines and Pfizer suspended their ads on the platform, leading to a big cash crisis for the company. Others should follow.

In his live stream, Musk claimed hate speech has decreased on the platform since he took over and asked advertisers to be patient, warning them that the company would do “a lot of things stupid” in the coming weeks.

“If we don’t make bold moves, how are we going to make big improvements? We have to be adventurous here and I think we will make very big steps forward,” he said.

For now, Twitter relies exclusively on advertising for its revenue. Musks’ goal is to cut that amount in half, while bringing in more money from subscriptions. In Thursday’s email, Musk told employees that the “priority over the past 10 days” was to grow and launch Twitter’s $8 monthly subscription service, which includes a blue checkmark next to it. named after paying members – the mark had previously only been granted to verified accounts.

The project has had a rocky rollout, as fake accounts newly purchased this week attempted to impersonate high-profile figures such as basketball star LeBron James and pharmaceutical company Eli Lilly.

In a second email to employees, Musk said the “top priority” over the next few days is to suspend “bots/trolls/spam” exploiting the verified account system.

During the rollout of the new subscription service, Twitter Blue, on Friday, a flood of fake accounts had been frozen by the company, according to tech reporter Zoe Schiffer.

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