Musk says Twitter in precarious position, defends cost cuts
Elon Musk is defending his massive cost-cutting at Twitter as necessary for the social media platform to survive next year, due in part to debt payments tied to his USD 44 billion takeover of the company. This company is like, basically, youre in a plane that is headed towards the ground at high speed with the engines on fire and the controls dont work, Musk told a late-night audience on a Twitter Spaces call Tuesday.
Thats after Elon Musk said earlier on Tuesday that he plans on remaining as Twitters CEO until he can find someone willing to replace him in the job.
Musks announcement came after millions of Twitter users asked him to step down in an online poll the billionaire himself created and promised to abide by.
I will resign as CEO as soon as I find someone foolish enough to take the job! Musk tweeted. After that, I will just run the software & servers teams.
Since taking over the San Francisco social media platform in late October, Musks run as CEO has been marked by quickly issued rules and policies that have often been withdrawn or changed soon after being made public.
Musk said Tuesday night that he spent the last five weeks cutting costs like crazy and trying to build a stronger paid subscription service because otherwise Twitter might be at a roughly USD 3 billion loss next year. He in part blamed the USD 12.5 billion in debt tied to his April agreement to buy the company, as well as the Federal Reserves recent interest rate hikes.
Some of Musks actions have unnerved Twitter advertisers and turned off users. He has laid off more than half of Twitters workforce, released contract content moderators and disbanded a council of trust and safety advisors that the company formed in 2016 to address hate speech and other problems on the platform.
The Tesla CEO has also alienated investors at his electric vehicle company over concerns that Twitter is taking too much of his attention, and possibly offending loyal customers. Even more unnerving for investors, Tesla shares are plummeting. Shares of Tesla are down 35% since Musk took over Twitter on Oct. 27, costing investors billions. Teslas market value was over $1.1 trillion on April 1, the last trading day before Musk disclosed he was buying up Twitter shares. The company has since lost 58% of its value, at a time when rival auto makers are cutting in on Teslas dominant share of electric vehicle sales. Shares fell Wednesday, as they have every day this week. A single share of Tesla that cost about $400 to start the year, can now be had for less than $140. Musk sought to defend some of his recent Twitter decisions on the Twitter Spaces call.
They may seem sometimes spurious or odd or whatever, Musk said. Its because we have an emergency fire drill on our hands. Thats the reason. Not because Im naturally capricious. Or at least, aspirationally, Im not naturally capricious.
(Except for the headline, this story has not been edited by The Federal staff and is auto-published from a syndicated feed.)
