Elon Musk’s Twitter: Will there be layoffs? How many people could be fired?
Upon closing the deal to purchase Twitter on Thursday, Elon Musk handed pink slips to top executives and is reportedly preparing for cuts companywide.
Twitter’s new owner Elon Musk started the first of what could be considerable cuts to the company’s work force on Thursday after finally closing the $44 billion deal to take the social media platform private. First to go were a handful of top executives including CEO Parag Agrawal, CFO Ned Segal and Chief Legal Officer Vijaya Gadde.
Those dismissals could cost Musk a pretty penny, over $120 million in “golden parachute” packages agreed to as part of acquisition deal. The billionaire CEO of Tesla said the firings were “for cause” which may let him wiggle out of parting with more money for the severance. To avoid paying other employees large sums of money before they are sacked, the New York Times reported that Musk intends to make cuts to the 7,500-strong work force before 1 November.
Twitter layoffs timed to avoid employee stock grants
The exact nature of the expected layoffs isn’t clear yet but ever since the SpaceX founder decided to buy Twitter in April rumors about what they would look like have swirled. Citing unidentified people familiar with the matter, the Times reported that managers have been asked to compile lists of employees to fire.
The cuts would take place before 1 November and could have begun as soon as Saturday. The timing of the layoffs would allow Musk to avoid paying out stock grants to those employees as part of their compensation. He would still however have to pay cash in the grants stead under the terms of the takeover agreement.
Musk could fire up to 50 percent of Twitter employees
There had been rumors that new owner planned to liquidate 75 percent of the work force, but Market Watch reported that he told workers that wasn’t true. However, Ross Gerber told the Times that Jared Birchall, the head of Mr. Musk’s family office, told him that it could be “somewhere around 50 percent of people” on the street.
These are far deeper cuts than had been speculated last spring. Previously it had been reported that the work force would increase slightly in 2022 before being whittled down by several hundred in 2023 with plans to increase the total number of workers to over 11,000 by 2025.