Social media platform Twitter Inc TWTR could have a new owner with a pending $44-billion acquisition by Tesla Inc TSLA CEO Elon Musk is completed, and the deal could bring massive job cuts to the company.
What Happened: Twitter could cut 75% of its workforce if the acquisition by Musk is finalized, according to a Thursday Washington Post report. The cuts would take Twitter’s staffing levels from 7,000 to around 2,000.
The job cuts could occur immediately after the acquisition is completed. The deadline for the $44-billion acquisition by Musk is Oct. 28.
Twitter sent a memo to employees to attempt to assure them there are not plans for mass layoffs. The report from the Post said if the deal with Musk does not go through, Twitter could still cut 25% of its employees.
Twitter said costs savings and potential job cuts talks were tabled due to the acquisition. Employees were told that there would be “tons of rumors and speculation” about job cuts as the deal nears completion.
“Those discussions stopped once the merger agreement was signed,” Twitter General Counsel Sean Edgett said.
Related Link: Do Fired Tesla Employees Love Or Hate Elon Musk?
Where Layoffs Could Occur At Twitter: After announcing the acquisition of Twitter earlier this year, Musk held a town hall meeting with Twitter employees who could ask questions. One of the popular topics was the discussion of job cuts.
Read more about the possibility of Musk selling additional Tesla shares to finance the Twitter deal.
Photo via Shutterstock.
“If someone is getting useful things done, that’s great. If they’re not, then I’m like, 'why are they at the company?'” Musk said of Twitter employees.
Musk has been an opponent of remote workers, something that made headlines earlier this year when he told Tesla employees to return to the office or find a new job.
Musk told Twitter employees that if they are exceptional at their job, they should be allowed to work remotely. The Tesla CEO gave some leeway with remote workers at Twitter given that “Tesla makes cars, and you can’t make cars remotely.”
When speaking directly on if there would be layoffs after the acquisition, Musk said it would depend on the financial situation of the company.
“The company does need to get healthy. Right now the costs exceed the revenue.”
Musk told those worried about job cuts that if they were “significant contributors” to Twitter they had nothing to worry about.
Musk has also put an emphasis on free speech, something that could impact job cuts and employees at the social media company. Musk told Twitter employees that people should be allowed to say racist things on the social media platform but Twitter shouldn’t promote it.
The comments by Musk could upset some employees at Twitter who don’t necessarily agree with Musk.
Musk could look to cut employees who don’t agree with the new direction of the company. A push to get more workers to work out of an office over remote work could also be a determining factor in who gets to stay and who could ultimately go.
TWTR Price Action: Twitter shares lost 4.88% Friday, closing at $49.89.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.