- Elon Musk mentioned Twitter is like “a aircraft headed in direction of the bottom” in a Twitter Area on Tuesday.
- He defined that he had reduce prices as a result of Twitter had a predicted adverse money stream of $3 billion subsequent 12 months.
- Musk has slashed employees numbers by almost two-thirds since shopping for Twitter in October.
Elon Musk in contrast Twitter to a aircraft crash, as he defined his rationale for reducing prices on the firm by enacting mass layoffs within the weeks after he purchased it.
“This firm is such as you’re in a aircraft that is headed in direction of the bottom at excessive velocity, with the engines on hearth, and the controls do not work,” Musk mentioned in a Twitter Space late Tuesday night.
The Monetary Instances first reported on the feedback. Insider has listened to Musk’s look on the Twitter Area, which was titled “Scale, Complexity, and variety of engineers,” and hosted by developer George Hotz
Throughout the chat, Musk acknowledged that his actions “might sound typically spurious or odd, or no matter.”
“It is as a result of we now have an emergency hearth drill on our arms,” he added. “Not as a result of I am like naturally capricious.”
The Twitter CEO — who’s presently trying to find his personal substitute — mentioned that earlier than his cost-cutting measures, the corporate was on monitor for a adverse money stream of round $3 billion subsequent 12 months.
The corporate, Musk mentioned, is ready to make round $3 billion in income in 2023, with web money outflows of round $6.5 billion. In Twitter’s 2021 annual report, the corporate reported income of round $5 billion, with whole prices of roughly $5.6 billion, and a web lack of $221,000.
Twitter’s monetary state of affairs can be impacted, Musk mentioned, by the $12.5 billion of debt the corporate took on as a part of Musk’s buy. That debt has annual servicing prices of round $1.5 billion, Musk mentioned. These prices have elevated as a result of rates of interest are “going loopy,” he added.
Due to layoffs and constructing subscriber income via Twitter Blue, Musk now believes the corporate will break even on money stream subsequent 12 months. He added that the corporate could be “useless” if he hadn’t made adjustments.
Employees numbers have fallen from 7,000 to roughly 2,300 since Musk took over, per Insider’s Kali Hays. The New York Instances additionally reported that Twitter has stopped paying hire on its places of work, and has refused to pay $200,000 in prices for personal jet flights.
Throughout the Twitter Area, Musk additionally spoke about his conferences with advertisers, explaining that they requested “arduous questions” about their return on funding due to the declining macroeconomic state of affairs.
“While you wouldn’t have a transparent reply, then advertisers do not wish to promote as a result of they’re being sane,” he added.
Twitter customers voted for Musk to step down as CEO, in a ballot posted hours after he was photographed with the CEO of the Qatar Funding Authority, which has a $375 million stake within the firm.
Twitter didn’t instantly reply to Insider’s request for remark.
