Tesla CEO and Twitter chief Elon Musk has informed Twitter staff that the company’s “financial picture going forward is dire.” Noting 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 could 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 dire financial situation of the social media platform. “There is no way to sugarcoat the message,” Musk wrote, adding:
Frankly, the economic picture going forward is dire.
He went on to detail that the financial situation is worse for a company like Twitter that relies heavily on advertising in a challenging economic climate. “70% of our advertising is brand, rather than specific performance, which makes us doubly vulnerable,” he stressed.
Musk continued, “That’s why the priority over the last ten days has been to develop and launch Twitter Blue Verified subscriptions,” elaborating:
Without significant subscription revenue, there’s a good chance Twitter won’t survive the coming economic downturn. We need about half of our revenue to be subscriptions.
However, Musk said the social media company will still be “significantly dependent on advertising,” so he’s working to “ensure Twitter continues to appeal to advertisers.” The billionaire emphasized: “The road ahead is difficult and will require intense work to succeed.”
The Tesla and Spacex CEO 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 are required to be in the office for a minimum of 40 hours per week unless they are physically unable to travel or have critical personal commitments.
Also, Musk held an emergency meeting with Twitter employees on Wednesday. He reportedly so:
Bankruptcy is not excluded.
After the meeting, two Twitter executives, Robin Wheeler and Yoel Roth, are said to have left the company. Last week, Musk laid off around 50% of Twitter employees, claiming he had no choice since the social media company is losing over $4 million a day.
Musk admitted Wednesday that his new $8-a-month verification system has problems. “Too many corrupt old blue ‘verification’ ticks exist so there is no choice but to remove the old blue in the coming months,” he tweeted. Nevertheless, he insisted Twitter usage has since increased he took over the platform.
This week, he outlined how Twitter could generate revenue as a payments company after it filed 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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