What you need to know
- Twitter laid off a large portion of its workforce on Friday.
- Elon Musk attributes the move to Twitter's loss in revenue as advertisers press pause on the company.
- Twitter's most recent quarter showed an increase in users but a decrease in revenue.
- The company is currently facing litigation for not giving employees enough notice before announcing the layoffs.
Things aren't looking so good at Twitter, as the company just finished laying off much of its workforce. Amid a large number of employees announcing their exits from the company on the platform, Elon Musk has taken to Twitter to shed some light on the decision.
Musk wrote in a tweet that he had no choice as the company is apparently losing more than $4 million per day.
He also noted that employees are being offered three months of severance pay, which he touts as 50% more than the legal requirement.
Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.Everyone exited was offered 3 months of severance, which is 50% more than legally required.November 4, 2022
Musk previously addressed the company's "massive drop in revenue" in an earlier tweet, complaining that activist groups are pressuring advertisers.
That said, there were already signs that advertisers were cautious about Elon Musk's takeover before it was finalized. Twitter's second-quarter revenue showed a 1% decrease year-over-year despite an increase in monetizable daily active usage, which the company attributed to "advertising industry headwinds" and uncertainty around Musk's then-pending acquisition.
However, Musk suggests that the reactions from advertisers are unwarranted, explaining that Twitter's "strong commitment to content moderation remains absolutely unchanged" and claiming that the platform has actually seen a decrease in hate speech this week.
Excellent summary of Twitter’s Trust & Safety from the head of the team https://t.co/sJ1MBf9MubNovember 4, 2022
Meanwhile, Musk took no time in making changes after the deal closed, teasing the return of Vine and announcing a price increase for Twitter Blue, the company's subscription service that offers additional features like the edit button. Musk believes that tying in more features like Twitter verification can help the company offset its reliance on advertisers. However, it remains to be seen if users will take to the price increase.
Twitter is currently facing litigation for failing to give adequate notice to employees per California law.
