Elon Musk has told prospective investors in his $70 billion deal to buy Twitter that he will slash the social network’s workforce by three quarters.
Twitter currently employs 7,500 workers around the world and Musk’s plan would leave the app with just over 2,000 employees. Documents obtained by the Washington Post detailed Musk’s plans to turn Twitter on its head. Experts, meanwhile, believe that the rump workforce will not be able to tackle misinformation on the platform.
Twitter had been planning to some of its workforce, having spent around $2.3 billion on its workforce last year and the top brass wanted to reduce that by around $1.27 billion. The company had also wanted to cut its infrastructure, getting rid of some of its data centres.
Musk’s deal is due to be finalised by next Friday.
Speaking to the Post, Edwin Chen, formerly in charge of Twitter’s spam and health metrics and now CEO of content moderation start-up Surge, said that while he thought was overstaffed, Musk’s proposed cuts were “unimaginable.”
Chen also said the cuts would leave users vulnerable to hacks and exposure to offensive material such as child pornography – something no advertisers would want to ever be associated with or seen alongside.
“It would be a cascading effect where you’d have service going down and the people remaining not having the institutional knowledge to get them back up, and being completely demoralized and wanting to leave themselves,” Chen told the Post.
However, corporate governance expert Nell Minow said that Musk was likely shopping ambitious plans to investors and would be unable to implement his sweeping changes.
“He’s got to be able to show if he makes those cuts, what happens next?” she asked, rhetorically. “What’s he gonna replace it with, AI?”
The documents seen by the Post also shed some light on how Musk plans to make Twitter profitable. Firing most of the staff would be the first step, before hiring “more effective” (i.e. cheaper) workers and expanding initiatives that he believes will bring in more revenue, such as a subscription. Employees told the post that they do not think subscriptions would be profitable and may instead harm Twitter’s business model.
The company is also planning to institute a performance review system called stack raking, which requires managers to grade employees on a numerical curve so that a set percentage of workers will always be marked as low performers.
Employees have protested the move, but Twitter executives say it is a common practice among tech companies.
Musk has since admitted to investors that he paid too much for Twitter. His $54.20 US per share offer was around one-third higher than Twitter’s price at the time,
By Thursday, Twitter was trading at $52.44 US, up more than 11 per cent over the month, but around 13 per cent lower than what it was trading at last year.
