Elon Musk’s reaction on Friday to the latest wave of Twitter chaos was to tweet a photo of the company logo superimposed on a tombstone. Former Twitter employees wonder if the company’s problems are indeed existential.
Since Tesla’s chief executive took office last month, the company has been hit with massive job cuts, an advertiser boycott, bankruptcy warnings and now a massive resignation among its remaining staff.
No wonder trending topics on Twitter this morning included #RIPTwitter and #TwitterMigration as the turmoil worsened.
Here we answer some questions about the scale of the crisis.
How many employees have left Twitter?
Musk laid off about half of the 7,500 employees in the first week of November, days after taking office. This left about 3,750 workers. Overnight, an undetermined number of those employees left after Musk gave them a deadline of 5 p.m. ET on Thursday to accept “long, high-intensity hours” and be “extremely hardcore” or else leave with three months of work. severance pay. According to a report, 75% chose the severance package, which would leave fewer than 1,000 employees at Twitter.
The departures hit various departments, including the press team, meaning questions about the extent of the cuts and the impact on the platform now go unanswered. Instead, former employees fill the void.
Could Twitter collapse?
Evidence on social media showed a number of engineers left in the wake of Musk’s ultimatum, although Twitter’s new owner stressed that the new-look company would be “much more product-focused.” ‘engineering’ under his ownership and that ‘those who write great code will make up the majority of our team’.
There are now fears the site is vulnerable to technical failures and bugs, amid signs that the complex system that underpins Twitter is already cracking. Two-factor authentication has already been affected and there have been issues with retweeting.
Steven Murdoch, professor of security engineering at University College London, said the platform could struggle to deal with “complex failures”, perform manual maintenance or tackle security threats . It will be difficult to simply replace deceased engineers. “Twitter might try to hire new employees or redeploy existing staff, but getting up to speed with how the affected systems work can take months, even with a smooth handover process. Every major website has developed its own system. unique and anyone coming from outside will have a steep learning curve.
Even before Musk arrived, there had been signs of trouble. Former Twitter security chief Peiter Zatko warned that information security standards were poor. He feared Twitter was being hacked “at Equifax level”, referring to the 2017 attack on a credit reporting company that exposed the data of 147 million people in the United States.
Could Twitter go bankrupt?
Musk warned this month that the company could go bankrupt, saying that without increased subscription revenue it may not survive the next recession. Advertising accounts for 90% of Twitter’s $5.1bn (£4.3bn) annual revenue, but this revenue stream has been hit hard by a pause in spending by major customers including General Motors and the company behind the cereal brands Cheerios and Lucky Charms. Musk confirmed there was a “massive drop” in ad revenue following the takeover.
The financial troubles – Twitter has posted losses for 10 of the last 12 years – have been compounded by a confused relaunch of the subscription service, Twitter Blue, which was discontinued after imitators jumped on the offer to be ” verified” by simply paying. $7.99 per month.
What if advertisers don’t come back?
This would be very serious for Twitter. The company added nearly $13 billion in debt to its balance sheet as a result of the takeover, and it bears interest costs of about $1 billion a year. A measure of a company’s ability to pay these costs is its cash flow. According to Twitter’s latest set of quarterly results as a publicly traded company, Twitter generated negative free cash flow (spending more money to run the business than it receives) of nearly $124 million. of dollars.
Farhad Divecha, chief executive of UK digital marketing agency Accuracast, said fears over “brand safety” on Twitter were already a concern for advertisers. Now they will worry about the quality of service they will get from Twitter staff, he added.
“The disenfranchisement of staff obviously looks like a problem. And while Elon didn’t want to negatively impact ad services, as an agency managing advertisers’ budgets, we’re concerned about the quality of service we get from Twitter ad support and Twitter account managers who look after our agency account and our clients. accounts,” he said.
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