Takeover of Twitter by Elon Musk | Two weeks of turmoil

Elon Musk has a request. Hours after finalizing the acquisition of Twitter for 44 billion US the previous day, he gathered human resources managers in a “crisis room” at the company’s offices in San Francisco. He told them to prepare for mass layoffs.

(San Francisco) According to six people with knowledge of the discussion, Twitter workers must be laid off immediately and those laid off will not receive bonuses due on 1eh November.

The executives warned their new boss that his plan could violate labor laws and break contracts with workers, which would lead to legal action against the company, according to these people. But Musk’s team says he’s used to going to court and paying penalties, and he’s not worried about those risks. Therefore, Twitter’s human resources, accounting and legal departments are scrambling to find a way to comply with his order.

Two days later, Musk learned how expensive the fines and potential lawsuits would be, according to three people. Delays are also increasing as managers haggle over which employees to fire. He decided to wait until after 1eh November to cut those jobs.

The immediate sequence of the layoffs, the subsequent panic and about-faces mirrored the turmoil on Twitter since Musk took over the company two weeks ago.

The 51-year-old arrived with ideas for how the business should work, but no overall plan to implement them. He then quickly tackled the commercial, legal and financial complexities of managing a platform that qualifies as a global public space.

The fallout has often been catastrophic, according to 36 current and former Twitter employees, people close to the company, internal documents and records of internal discussions. Several senior executives were summarily fired via email. An engineering manager, who was asked to lay off hundreds of workers, threw up in a trash can. Others, completely overwhelmed, slept in the office to do Musk’s bidding.

Twitter, under financial pressure from debt and a slowing economy, is now indistinguishable from what it was a month ago. Last week, Musk laid off 50% of the company’s 7,500 employees. Executive resignations continued. Misinformation ran rampant on the platform during last Tuesday’s midterm election. An important project to increase revenue from subscriptions has struggled. Some advertisers were surprised.

Musk, who did not respond to a request for comment, told employees at a meeting Thursday that Twitter’s situation was dire.

“There is a huge negative cash flow, and bankruptcy is not out of the question,” he said, according to a recording viewed by New York Times.

Musk added that everyone must work hard to keep the company afloat. “For those who are able to go out and play to win, Twitter is a great place,” he said. For those who can’t, Twitter is not for you. »

It’s sinking! »

Musk arrived at Twitter’s San Francisco offices on October 26, carrying a white porcelain sink. He tweeted ” It’s sinking! », a popular expression to support his intention to clean up the company.

Leslie Berland, Twitter’s chief marketing officer, encouraged employees to greet Musk and escort him to the office. He was seen chatting with employees at the company cafe.

But the mood quickly changed. The next day, Parag Agrawal, Twitter’s chief executive, and Ned Segal, chief financial officer, were in the office, according to two people familiar with the situation. When they learned that Musk’s acquisition of Twitter was happening that afternoon, they left the building, unsure of what the new owner would do.

Agrawal and Segal soon received emails telling them they were fired, two people familiar with the situation said. Vijaya Gadde, Twitter’s chief legal and policy officer, and Sean Edgett, chief legal officer, were also fired. Edgett, who was in Twitter’s offices at the time, was fired.

That night, Twitter held a Halloween party called “Trick or Tweet” for employees and their families. Some employees dressed up and tried to maintain a festive atmosphere. Others cried and hugged each other.

Twitter takeover by Elon Musk

Clash of cultures


Twitter office in New York

Along with him, Elon Musk has brought his own advisors, many of whom have worked in his other businesses, such as digital payment company PayPal and electric car maker Tesla.

The group lived in the “crisis room”, on the second floor of a building attached to Twitter’s headquarters. This room, which Twitter uses to celebrate big-spending advertisers and dignitaries, is filled with company memorabilia.

Advisors include venture capitalists David Sacks, Jason Calacanis and Sriram Krishnan, Musk’s personal attorney, Alex Spiro, his chief financial officer, Jared Birchall, and Antonio Gracias, a former Tesla executive. They were joined by engineers and others from Tesla, Neuralink, Musk’s brain interface startup, and Boring Co, his tunneling company.

Once, Musk was spotted with his 2-year-old son, X Æ A-12, at Twitter’s offices as he greeted employees.

In meetings with Twitter executives, Musk was blunt. In an Oct. 28 meeting with human resources managers, he said he wanted to cut staff immediately, before the Oct. 1 deadline.eh November, when employees will receive retention bonuses.

A Twitter team has begun creating a financial model to estimate the cost of layoffs. Another built a model to show how much Musk could pay in court costs and fines if he made quick cuts, according to the three people.

On October 30, Musk learned that the quick approach could cost millions of dollars more than firing people with their expected bonuses. He agreed to delay the process, according to the four people.

A trip to New York

As Twitter officials compiled lists of people to be fired, Musk traveled to New York to meet with advertisers, who provide a large portion of Twitter’s revenue.

In several meetings with those advertisers, Musk proposed a system that would allow Twitter users to choose what kind of content the service exposes them to – such as movie ratings – indicating that those Brands can better target their advertising on the platform. It also promised to improve the product and further personalize users and ads, according to two people with knowledge of the conversations.

But his efforts were compromised by the departure of two New York-based Twitter executives, Leslie Berland and Jean-Philippe Maheu, a vice president in charge of advertising. They are well known in the advertising industry.

These Twitter executives “had great relationships with top Fortune 500 executives — they were incredibly transparent and inclusive,” said longtime advertising executive Lou Paskalis. “These qualities engender tremendous confidence, and these qualities are now being challenged. »

Brands such as Volkswagen, General Motors and United Airlines have said they will pause their ads on Twitter while they assess Musk’s ownership of the platform.

The outcome

As one layoff followed another, tech recruiters saw an opportunity. Senior executives from competing companies such as Google’s Meta and Alphabet sent messages to some of Twitter’s fired employees, two people who received the documents said.

Last Saturday, Musk’s advisers realized the cuts might be too big, according to four witnesses. Some have asked the fired engineers, designers and product managers to return to their old jobs, three people familiar with the talks said. The Technology Newsletter Platformer reported earlier in this transition.

At Goldbird, Twitter’s revenue division, the company needs to bring back those who run core money-making products that “no one else knows how to run,” people with knowledge of the industry said. One manager agreed to try to rehire some fired employees, but expressed concern that they were “weak, lazy, unmotivated and might even be up against a ‘Twitter Elon’,” they said. said two people familiar with the matter.

Internal conflict

Inside Twitter, some employees contradicted Musk’s advisers.

This week, security officials on Musk’s team disagreed on how Twitter should meet its obligations to the Federal Trade Commission. Twitter agreed to a settlement with the FTC in 2011 over privacy violations, requiring the company to submit regular reports on its privacy practices and agree to audits.

On Wednesday, a day before the deadline for Twitter to submit a report to the FTC, Lea Kissner, chief information security officer, Damien Kieran, chief privacy officer, and Marianne Fogarty, chief compliance officer, resigned.

In internal messages sent later in the day, one employee spoke about the resignations and suggested that Twitter’s internal product privacy reviews were not proceeding as they should under FTC regulations.

Some engineers may be required to ‘self-certify’ that their projects comply with the agreement, rather than relying on assessments from lawyers and executives, a change that could lead to ‘major events’, letter by L. employee in question.

The FTC said it was following developments at Twitter with “deep concern” and that “no CEO or company is above the law.” Musk later sent employees an email saying Twitter would comply with the FTC settlement.

Other Twitter executives resigned on Thursday, including Kathleen Pacini, head of human resources, and Yoel Roth, head of trust and safety.

During a meeting with employees that day, Musk tried to be optimistic about Twitter’s future.

“Twitter can build an incredibly important service in the world and become the great public square,” he said, noting that the platform should be a “battleground of ideas” where debate can ” take the place of violence in many cases.

This article was originally published on The New York Times.

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