In Twitter vs Elon Musk saga, new reports have emerged that show the mega-billionaire has plans to cut the microblogging platform’s workforce by about 75%. Twitter's current employee strength stands at 7,500. If Musk goes ahead with his highly controversial plan, it could reduce the total workforce to about 2,000.
Earlier this month, after a lot of backtracking, Musk had said he would buy Twitter at the agreed $54.20 per share price if debt financing could be secured. Now the Tesla chief executive has told prospective investors that he intends to let go 75% of Twitter's workers, a global media organisation reported citing documents related to the deal.
Also, even if the deal is not sealed before the court-set deadline of October 28, the big churning at the microblogging company is inevitable. The reason is Twitter, even before the deal with Musk, had planned to initiate some cost-saving plans, which were then put on hold in light of the takeover agreement with Musk.
Twitter, reportedly, is eying to reduce its overall cost and employee payroll by about $800 million by 2023. For this plan to succeed, Twitter will have to cut the workforce significantly and also introduce measures to reduce infrastructure, including the number of data centres. These measures, if implemented, could have a drastic effect on Twitter's ability to contain the rising level of hacking attempts, fake news, spam accounts and hate-mongering, say experts.
In a conference call following the electric vehicle maker's quarterly results on October 19, Elon Musk said he and other investors are "obviously overpaying for Twitter" but the long-term potential for Twitter is, in order of magnitude, greater than its current value. "I am excited about the Twitter situation because obviously another part incredibly well. And I think it's massive that this sort of languished for a long time, but has incredible potential," said Musk.
The world's richest person first proposed to buy out Twitter in April. Musk later tried to back out, citing Twitter's inability to provide data on spam or fake accounts on its platform. However, Twitter sued him in the U.S. Delaware Court of Chancery, accusing him of "knowingly" breaching the $44-billion deal. That price, presented by Musk on a take-it-or-leave-it basis in an unsolicited public offer, represented a 38% premium over Twitter’s unaffected share price.
Twitter shares, after falling to $32.65 in July, have recovered again, in the hope of a possible takeover by Musk. The Twitter stock surged 1.18% to $52.44 on Thursday, with the shares rising 3.90% in the past week. The tech stock has risen 27.07% in the past month.
